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No.
Ministry of Industry and Minerals
Preliminary Feasibility Study Report on

Mining and Industrial Sector in
Mid-Western, Iraq
Final Report
April, 2010
Japan International Cooperation Agency (JICA)
UNICO International Corporation

MITSUI & Co., LTD.
Toyo Engineering Corporation
MEE
JR
10-003
Preface
Japan International Cooperation Agency (JICA) conducted “The Preliminary Feasibility Study
on Mining and Industrial Sector in Midwestern Iraq.”
JICA sent the study team to Amman and Beirut three times from December 19 for 10 days, from
January 22 for 9 days and from March 23 for 6 days, respectively to grasp the actual situation of the
main industrial sectors in Midwestern Iraq and to examine a scenario of future development.
The team held discussions with the officials concerned of the Government of Iraq, and conducted
a field study at the study area. After the team returned to Japan, further studies were carried out.
Then, a mission was sent to Beirut in Lebanon in order to discuss the draft outline, and based on this
result, the present report was finalized.
This Preliminary Feasibility Study report will be referred when Iraq and Japan consider the
further cooperation on Mining and Industrial Sector in Midwestern Iraq.
April, 2010
Letter of Transmittal
We are pleased to submit to you the Preliminary Feasibility Study Report on Mining and
Industrial Sector in Mid-Western region of Iraq.
This survey was conducted by the Consortium of UNICO International Corporation,

MITSUI Co., Ltd. and Toyo Engineering Corporation, under a contract to JICA, during the
period from November, 2009 to April 2010. In conducting the survey, the study team collected
the data and information of Mining and Industrial Sector to examine the feasibility and rationale
of the project with due consideration of the present situation of Iraq and formulated the most
appropriate outline design for the development of Mining and Industrial Sector.
The Study team (Consortium of UNICO International Corporation, Mitsui Co. Ltd. and
Toyo Engineering Corporation) made the best efforts to contribute to both Governments.
We hope that the Study Report would be quite helpful and effective when both Governments
will consider the feasibility of the project in future in more detail.
Very truly yours,
Isao Kawabata
Project manager,
Preliminary Feasibility Study Team for
Mining and Industrial Sector in Mid-Western in Iraq
The Consortium of
UNICO International Corporation,
Mitsui Co., Ltd. and
Toyo Engineering Corporation
MAP of the Iraq
Al-Qaim
Akaz
Akashat
Contents of Final Report
Page
Summary
Chapter 1 Background of the Project
1.1 Purpose of the Study ..........................................................................................................1-1
1.2 Contents and Method of the Study .....................................................................................1-1
1.3 Study Structure...................................................................................................................1-2
1.4 Study Schedule and Overview of Study Trip.....................................................................1-3
1.4.1 Study Schedule .............................................................................................................1-3
1.4.2 Overview of Study Trip................................................................................................1-4
Chapter 2 General Information of Iraq and the Project Site
2.1 General Information of Iraq ...............................................................................................2-1
2.2 Al-Anbar Governorate........................................................................................................2-1
2.2.1 General Information .....................................................................................................2-1
2.2.2 Geography ....................................................................................................................2-2
2.2.3 MIM Sector in Iraq.......................................................................................................2-3
Chapter 3 Overview of Industry and Minerals Sector in Iraq
3.1 Overview of Industry and Minerals Sector ........................................................................3-1
3.2 History and Organization of the Ministry of Industry and Minerals..................................3-2
3.2.1 History of the Ministry of Industry and Minerals ........................................................3-2
3.2.2 Organization of the Ministry of Industry and Minerals................................................3-4
3.2.3 Outline of State Owned Companies in Industry and Minerals Sector..........................3-4
i
Chapter 4 Current Status of and Development Strategies for the Industry and
Minerals Sector in Iraq
4.1 Current Status and Issues of the Industry and Minerals Sector in Iraq ..............................4-1
4.1.1 Current Status ...............................................................................................................4-1
4.1.2 Issues ............................................................................................................................4-3
4.2 National Development Strategy and Positioning of the Industry and Minerals Sector......4-4
4.2.1 Overview of the National Development Strategy of Iraq.............................................4-4
4.2.2 Positioning of the Oil and Gas Industry .......................................................................4-5
4.2.3 Positioning of the Industry and Minerals Sector ..........................................................4-6
4.2.4 Positioning of the Chemical Fertilizer Industry ...........................................................4-8
4.3 Reconstruction Policies for the Industry and Minerals Sector ...........................................4-10
4.3.1 Recent Reconstruction Policies and their Outcomes....................................................4-10
4.3.2 Directionality of Reconstruction Policies beyond 2010...............................................4-11
4.4 Background and Results of Privatization Policies for the Mining and Manufacturing
Sector..................................................................................................................................4-12
4.4.1 Privatization Policies of the Coalition Provisional Authority (CPA) ...........................4-12
4.4.2 Privatization Policies of the Ministry of Industry and Minerals and their Results.......4-12
4.5 Investment Law of Iraq and Examples of Introducing Private Capital ..............................4-14
4.5.1 Investment Law of Iraq (Original copy translated from Arabic to English is
Attached to the Appendix)............................................................................................4-14
4.5.2 Example of Introducing Private Capital in the Industry and Minerals Sector..............4-16
4.6 Assistance by International Aid Agencies (Donors) ..........................................................4-17
4.7 Mining and Manufacturing Sector in Mid-Western Iraq....................................................4-18
4.7.1 Mining and Manufacturing Sector in Mid-Western Iraq ..............................................4-18
4.7.2 Glass Industry...............................................................................................................4-20
4.7.3 Cement Industry ...........................................................................................................4-23
4.7.3.1 Overview of Three Cement Companies in Iraq....................................................4-23
4.7.3.2 Overview of Refractory Bricks in Iraq.................................................................4-26
ii
4.7.4 Chemical Fertilizer Industry.........................................................................................4-26
4.7.5 Projects concerning the Industry and Minerals Sector in Anbar Province ...................4-27
Chapter 5 Market Trend of Chemical Fertilizer Industry
5.1 Global Market Trend of Chemical Fertilizer Industry .......................................................5-1
5.1.1 Nitrogen Fertilizer ........................................................................................................5-1
5.1.2 Phosphate Fertilizer......................................................................................................5-7
5.1.3 Potassium Fertilizer......................................................................................................5-13
5.2 Trend of Chemical Fertilizer Industry in Iraq ....................................................................5-17
5.2.1 Production Trend ..........................................................................................................5-17
5.2.2 Demand Trend ..............................................................................................................5-21
5.2.3 Fertilizer Production, Consumption and Trade in Iraq’s Neighboring Countries

and Other Major Countries...........................................................................................5-26
5.2.4 Fertilizer Prices and Related Government Subsidies in Iraq........................................5-32
5.2.5 Iraqi Trade Balance ......................................................................................................5-34
5.3 Chemical Fertilizer Demand Forecast in Iraq ....................................................................5-35
5.3.1 Agriculture Sector and Agricultural Policy in Iraq.......................................................5-35
5.3.2 Current Conditions and Challenges of Water Resources in Iraq ..................................5-39
5.3.3 Chemical Fertilizer Demand Forecast in Iraq ..............................................................5-45
5.4 Supply Mechanism of Raw Materials of Chemical Fertilizer Industry in Iraq ..................5-50
Chapter 6 State Company for Phosphate and Al-Qaim Chemical Complex
6.1 Overview of State Company for Phosphate .......................................................................6-1
6.1.1 Current Status of SCP...................................................................................................6-1
6.1.2 Plants and Other Facilities Owned by SCP ..................................................................6-2
6.1.3 Trend of SCP Operation ...............................................................................................6-5
6.1.4 SCP Product Prices.......................................................................................................6-9
iii
6.2 Current Status of Operation of Al-Qaim Phosphate Fertilizer Complex (Result and
Review of Field Survey) ....................................................................................................6-9
6.2.1 Overall Process Flow and Plant Overview of Al-Qaim Phosphate Fertilizer
Complex .......................................................................................................................6-9
6.2.2 Flow (Block) Diagram, Design/Current Capacity, Issues and Technical

Observations of Each Unit ...........................................................................................6-12
6.2.2.1 Akashat Mine (Phosphate rocks Mining Unit).....................................................6-12
6.2.2.2 Beneficiation Unit ................................................................................................6-14
6.2.2.3 Sulfuric Acid Production Unit..............................................................................6-17
6.2.2.4 Phosphoric Acid Production Unit.........................................................................6-19
6.2.2.5 Fertilizer Production Unit.....................................................................................6-21
6.2.2.6 Ammonia Production Unit ...................................................................................6-25
6.2.2.7 Fluorine Salts Production Unit .............................................................................6-27
6.2.2.8 Utility Supply Units .............................................................................................6-27
6.2.2.9 Summary of Diagnosis of the facilities ................................................................6-28
6.3 Outlook of Akashat Mine Phosphate Rock Production......................................................6-28
6.3.1 Akashat Mine ...............................................................................................................6-28
6.3.2 Summary of the existing facilities................................................................................6-29
6.3.3 Observation of the existing facilities working conditions............................................6-29
6.3.4 Necessity of Rehabilitation ..........................................................................................6-30
6.4 Related Infrastructure.........................................................................................................6-30
6.5 Other topics, concern..........................................................................................................6-31
6.5.1 To Build up control system of whole complex.............................................................6-31
6.5.2 Human Resource Development for operation/maintenance.........................................6-31
6.5.3 Improvement of Management System .........................................................................6-32
6.5.4 Procurement of Spare Parts ..........................................................................................6-32
6.5.5 Waste Disposal (Gypsum) ..........................................................................................6-32
6.6 Rehabilitation Plan by SCP ................................................................................................6-32
iv
6.6.1 Rehabilitation Plan Formulated by SCP (Investment File) ..........................................6-32
6.6.2 Objective Observations on the Rehabilitation Plan......................................................6-35
Chapter 7 Environmental and social impact in Industry and Mineral sector in

Mid-Western district of Iraq
7.1 Environmental Assessment ................................................................................................7-1
7.1.1 Current environmental situation in Mid-Western district of Iraq .................................7-1
7.1.2 Environmental impact caused by the expected project ................................................7-3
7.1.3 Possible social impact from expected project ..............................................................7-5
7.2 Environment relating law in Iraq .......................................................................................7-6
7.2.1 Law of country .............................................................................................................7-6
7.2.2 Local regulations and rules ..........................................................................................7-14
7.2.3 Environmental Impact Assessment ..............................................................................7-14
7.3 Requirement of environmental protection in expected project area...................................7-26
Chapter 8 Conclusion and Recommendations
8.1 Macroscopic Observations .................................................................................................8-1
8.1.1 Current Status of MIM Sector in IRAQ .......................................................................8-1
8.1.2 Cement Industry ...........................................................................................................8-2
8.1.3 Glass & Ceramic Industry ............................................................................................8-3
8.1.4 Chemical Fertilizer Industry.........................................................................................8-4
8.2 Microscopic Observation of Phosphate Fertilizer Industry................................................8-7
8.2.1 Feedstock of Phosphate Rock ......................................................................................8-7
8.2.2 Current Operating Conditions ......................................................................................8-7
8.3 Conclusions ........................................................................................................................8-9
8.4 Recommendations ..............................................................................................................8-10
8.4.1 General remarks ...........................................................................................................8-10
v
8.4.2 Verification of the necessity of rehabilitation project of SCP ......................................8-10
8.5 Way Forward......................................................................................................................8-15
8.5.1 Information to be collected for the restoration of phosphate fertilizer industry...........8-15
8.5.2 Information to be collected for materializing the rehabilitation proposal by

Japanese ODA loan ......................................................................................................8-16
8.6 Auxiliary Support to Rehabilitation Project of SCP Complex ...........................................8-17
Appendix
vi
Contents of Table
Table 1: Basic data of Iraq...........................................................................................................2
Table 2: Estimated Amount of Investment Needed by Sector (calculated as of 2002) ...............4
Table 3: Glass Sector Project ......................................................................................................9
Table 4: Ceramic Sector Project..................................................................................................9
Table 5: Facility of the Iraqi State Company for Cement ...........................................................10
Table 6: Facility of State Company for Northern Cement...........................................................11
Table 7: Facility of State Company for Southern Cement...........................................................11
Table 8: Production Trend of Chemical Fertilizer Industry in Iraq (Ammonia, Urea)................13
Table 9: Production Trend of Chemical Fertilizer Industry in Iraq (Phosphate fertilizer) ..........14
Table 10: Production and Demand Balance of Urea in Iraq........................................................15
Table 11: SCP Activities..............................................................................................................21
Table 12: SCP’s Rehabilitation Goal...........................................................................................22
Table 3.2-2: State Owned Companies Controlled by the Ministry of Industry and Minerals
(Construction Industries) ........................................................................................3-6
(Textile Industries)..................................................................................................3-6
(Engineering Industries) .........................................................................................3-7
(Food and Pharmaceuticals Industries) ..................................................................3-8
(Industrial Services) ...............................................................................................3-8
(Petro-Chemical Industries)....................................................................................3-9
Table 4.1-1: Number of Employees and Per-capita Monthly Wage in the Industry and
Minerals Sector by Sub-sector................................................................................4-2
vii
Table 4.1-2: Gross Sales, Expenses, and Loss-Profit Balance in the Mining and
Manufacturing Sector by Sub-sector (2006 to 2008) .............................................4-2
Table 4.2-1: Estimated Amounts of Investment Needed in the Oil and Gas Sector
(calculated as of 2002)............................................................................................4-6
Table 4.2-2: Estimated Amount of Investment Needed by Sector (calculated as of 2002) .........4-6
Table 4.2-3: Estimated Amounts of Investment Needed in the Industry and Minerals Sector
by Industry (calculated as of 2002) ........................................................................4-9
Table 4.4-1: Factories and Plants Subject to Investment by Private Companies ........................4-13
Table 4.7-1: Glass Sector Project ................................................................................................4-23
Table 4.7-2: Ceramic Sector Project............................................................................................4-23
Table 4.7-3: Facility of Iraqi State Company for Cement ...........................................................4-24
Table 4.7-4: Facility of State Company for Northern Cement ....................................................4-25
Table 4.7-5: Facility of State Company for Southern Cement ....................................................4-25
Table 4.7-6: Facility of State Company for Refractoriness Industry...........................................4-26
Table 5.2-1: Production Trend of Chemical Fertilizer Industry in Iraq (Ammonia, Urea) .........5-17
Table 5.2-2: Production Trend of Chemical Fertilizer Industry in Iraq (Phosphate fertilizer) ....5-18
Table 5.2-3: Production and Demand Balance of Urea in Iraq ...................................................5-19
Table 5.2-4: Fertilizer Consumption by Nutrient and Regions ...................................................5-24
Table 5.2-5: Breakdown of Production Volume of Major Fertilizers by Country.......................5-27
Table 5.2-6: Breakdown of Consumption Volume of Major Fertilizers by Country...................5-28
Table 5.2-7: DAP Import and Export by Country .......................................................................5-29
Table 5.2-8: MAP Import and Export by Country.......................................................................5-30
Table 5.2-9: Urea Import and Export Volume by Country ..........................................................5-31
Table 5.2-10: Ammonia Import and Export Volume by Country ................................................5-32
Table 6.1-1: Trend of Production and Sales Volumes of SCP Products (1983-2006) .................6-5
Table 6.1-2: SCP Activities .........................................................................................................6-6
viii
Table 6.1-3: SCP Product Prices .................................................................................................6-9
Table 6.6-1: SCP’s Rehabilitation Goal ......................................................................................6-33
Table 7.1-1: Comparison of Energy Intensity .............................................................................7-2
Table 7.2-1: Maximum Acceptable Concentration of Pollutants in Air ......................................7-6
Table 7.2-2: Air Pollutants Emission Guidelines of World Bank 1)............................................7-8
Table 7.2-3: Limitation of Toxic Material Content in Water.......................................................7-10
Table 7.2-4: Water Quality Standard in Iraq................................................................................7-11
Table 7.2-5: Effluent Standard in Iraq.........................................................................................7-12
Table 7.2-6: Noise Level Measurement outside Buildings Measurement Unit dB .....................7-14
Table 7.2-7: JBIC’s Classification of Project ..............................................................................7-15
Table 7.2-8: Checklist of Environmental and Social impact by Project......................................7-16
Table 7.2-9: EIA Check List for Non-Ferrous Metal Smelting and Refining Project .................7-20
Table 7.2-10: Japanese EIA Procedure........................................................................................7-24
Table 7.2-11: Example of EIA Schedule .....................................................................................7-25
Table 8.1-1: MIM Sectors & SOEs .............................................................................................8-1
Table 8.1-2: Glass & Ceramic Products and Production Volume................................................8-4
Table 8.4-1: Comparison of P-Fertilizers Consumption by “INDEX”........................................8-14
Table 8.4-2: Country-wise Fertilizers Specific Consumption/Ha ...............................................8-15
ix
Contents of Figure
Figure 1: Trend of Urea Production by Plant in Iraq...................................................................15
Figure 2: Trend of SCP Production Volume by Product..............................................................21
Figure 3: Overall Process Flow of Al-Qaim Phosphate Fertilizer Complex ...............................22
Figure 1.1-1: Study Structure ......................................................................................................1-3
Figure 1.1-2: Study Schedule ......................................................................................................1-4
Figure 3.2-1: Organization of the Ministry of Industry and Minerals of Iraq .............................3-5
Figure 5.1-1: Ammonia Demand by Use ....................................................................................5-2
Figure 5.1-2: Distribution Map of Ammonia Production Capacity and Volume (2008) .............5-3
Figure 5.1-3: Overview of Major Importers and Exporters of Ammonia (2008)........................5-3
Figure 5.1-4: Map of Urea Production and Consumption Volumes (2007) ................................5-4
Figure 5.1-5: Overview of Major Urea Importers and Exporters (2007) ....................................5-5
Figure 5.1-6: Trend of Natural Gas, Ammonia and Urea Prices (USD/ton) ...............................5-6
Figure 5.1-7: Map of Phosphorus Ore Reserve (2008) ...............................................................5-8
Figure 5.1-8: Map of Phosphorus Ore Annual Extraction (2008 actual /2013 forecast).............5-8
Figure 5.1-9: Overview of Phosphorus Ore Exporters (2008 actual /2013 forecast) ..................5-9
Figure 5.1-10: Overview of Phosphorus Ore Importers (2008 actual /2013 forecast) ................5-9
Figure 5.1-11: Map of DAP Production and Export Volumes (2007) .........................................5-10
Figure 5.1-12: Map of DAP Distribution (2007).........................................................................5-11
Figure 5.1-13: Map of MAP Production and Export Volumes (2007) ........................................5-11
Figure 5.1-14: MAP of MAP Distribution (2007).......................................................................5-12
Figure 5.1-15: Potassium Chloride Production Volume by Country (2007) ...............................5-14
Figure 5.1-16: Potassium Chloride Export and Import Volume (2007) ......................................5-15
Figure 5.2-1: Trend of Urea Production by Plant in Iraq ............................................................5-20
Figure 5.2-2: Trend of Urea Sales by Plant in Iraq .....................................................................5-20
x
Figure 5.2-3: Trend of Urea Sales by Purchaser in Iraq ..............................................................5-21
Figure 6.1-1: Trend of SCP Production Volume by Product .......................................................6-5
Figure 6.1-2: Trend of Crude Oil Production Volume in Iraq .....................................................6-8
Figure 6.2-1: Overall Process Flow of Al-Qaim Phosphate Fertilizer Complex.........................6-10
Figure 6.2-2: Complex Overview................................................................................................6-11
Figure 6.2-3: Akashat Mine (Phosphate rocks Mining Unit) Block Flow ..................................6-12
Figure 6.2-4: Current Status of Storage Facilities for Phosphate rocks ......................................6-13
Figure 6.2-5: Beneficiation Unit Block Flow..............................................................................6-14
Figure 6.2-6: Stacker and Reclaimer...........................................................................................6-15
Figure 6.2-7: Current Status of Washing System ........................................................................6-16
Figure 6.2-8: Kiln 2.....................................................................................................................6-16
Figure 6.2-9: Sulfuric Acid Production Block Flow ...................................................................6-17
Figure 6.2-10: Sulfur Melting & Neutralization Area .................................................................6-18
Figure 6.2-11: Sulfur Furnace .....................................................................................................6-18
Figure 6.2-12: Current Condition of Sulfuric Acid Tank and Soil Condition .............................6-19
Figure 6.2-13 Phosphoric Acid Block Flow................................................................................6-19
Figure 6.2-14: Gear Box and Motors on Phosphoric Acid Reactor ............................................6-20
Figure 6.2-15: Current Condition of Filters ................................................................................6-21
Figure 6.2-16 Fertilizer Production Block Flow .........................................................................6-21
Figure 6.2-17: Current Condition around TSP Reaction Tank ....................................................6-23
Figure 6.2-18: Current Condition of Fertilizer Product Storagehouse ........................................6-23
Figure 6.2-19: Current Condition of De dusting System ............................................................6-24
Figure 6.2-20 Ammonia Production Block Flow ........................................................................6-25
Figure 6.2-21: Existing Multi-purpose Compressor....................................................................6-26
Figure 6.2-22: Current Condition of Primary Reformer .............................................................6-26
xi
Figure 8.1-1: Assumed Vicious Cycle of Industrial Activities ....................................................8-6
Figure 8.4-1: Factors Analysis ....................................................................................................8-13
Figure 8.6-1: Action Flow Chart for Materialization of Rehabilitation ......................................8-18
xii
ABBREVIATION
Abbreviations
Approx. Approximately
Ave. Average
BOD Biological oxygen demand
C.Water Cooling Water
Capa Capacity
CO2 Carbon Dioxide
COD Chemical oxygen demand
CPA Coalition Provisional Authority
DAP Di-ammonium Phosphate
DCS Distributed Control System
DDT/Org.Chlorides Dichlorodiphenyltrichloroethane per organic chlorides
DIA Diameter
EHS Environmental, Health and Safety
EIA Environmental Impact Assessment
EIS Environmental Impact Statement
El Electricity
EMP Environmental Management Plan
EQ Equipment
F/S Feasibility Study
FAO United Nations Food and Agriculture Organization
FEED Front End Engineering and Design
FOB Free On Board
FSU Former Soviet Union
FY Fiscal Year
GAP Southeastern Anatolia Project
GDP Gross Domestic Product
GDP (PPP) GDP (Purchasing Power Parity)
ha Hectare
I.Air Instrument Air
ID Iraqi Dinar
ID/ton Iraqi Dinar per ton
IFC International Finance Corporation
IG Inspector General
ABBREVIATION
JBIC Japan Bank for International Cooperation

JICA Japan International Cooperation Agency
K2O Potassium Oxide
KCL Potassium Chloride
kg/ha kilo-grams per hectare
km2 Square meters
3
km Cubic meters
L.P.Steam Low Pressure Steam
M.P.Steam Middle Pressure Steam
3
M /d Cubic meters per day
m3/s Cubic meters per second
MAP Monoammonium Phosphate
mg/l Milli-gram per liter
MIM Ministry of Industry and Minerals
Mkm2 Million square meters
MOA Ministry of Agriculture
MPDC Ministry of Planning and Development Cooperation
MST Ministry of Science and Technology
MW Megawatts
N.C.S. America North, Central and South America
N.Gas Natural Gas
NDS National Development Strategy
NGO Non-governmental Organization
NIC National Investment Commission
No Number
NP Compound Fertilizer Nitrogen & Phosphate
NPK Compound Fertilizer Nitrogen, Phosphate and Potassium
ODA Official Development Assistance
Ope Operation
OSHA US Occupational Safety & Health Association
P. Air Plant Water
PH Potential of hydrogen
PM Particulate Matter
PS Private Sectors
S/P Spare parts
ABBREVIATION
SCGC State Company for Glass & Ceramic Industry

SCP State Company for Phosphate
SOE State Owned Enterprises
SSP Single Super Phosphate
T.R.Water Treated Water
t/d ton per day
t/y ton per year
tCO2/Capita・y Annual Tons of CO2 per person
tons/ha Tons per hectare
TSP Triple Super Phosphate
UK United Kingdom
UN United Nations
UNDP United Nations Development Program
UNIDO United Nations Industrial Development Organization
USD United States Dollars
WHO World Health Organization
Yr Year
$/ton Dollars per ton
Summary
Summary
Summary
1. From the viewpoint of the reserves of oil and natural gas, Iraq is supposed to be one of the
world biggest countries and majority of national revenues are generated by the exportation of
crude oil and gas related products. However, oil production has recently been stagnant due
to the long-lasting wars and economic sanctions, which brought about the shortage of the
needed investment, feasible management and maintenance activities.
In the case of Iraqi Industry and Minerals sector formed by manufacturing, construction and
engineering industries, contributing far less ratio to the Iraqi national GDP, they are suffering
under more serious situation. It can be envisaged that the Industry and Minerals sector has
not received sufficient financial support from the government or international organizations
because of their lower priority for the national reconstruction process.
However, it is considered that the sector will play a significant role in Iraq which intends to
depart from excessive dependence on oil and gas sector toward industry diversification.
There are about seventy state-owned companies with a total of 180,000 employees in the
Industry and Minerals sector. Vitalization of the sector also has a significant meaning in
terms of creation of employment.
Therefore, the reconstruction and development of the Industry and Minerals sector is an
urgent task especially for Mid-western regions including three governorates such as Anbar,
Najaf and Karbala with little oil and natural gas resources. The study focused on chemical
fertilizer sector in the Industry and Minerals sector in such region to examine a scenario of
future development of the industry based on various conditions and make a proposal to a
project under planning for the Government of Japan to use the study results in the
examination of a future ODA loan project for the Industry and Minerals sector.
During the study, meetings with concerned parties and representatives of the Ministry and
Al-Anbar Governorate were held three times, actually two times in Amman and one time in
Beirut within five-months (for the first, second at Amman and the third meeting at Beirut , 4,
5 and 2 days were appropriated respectively). During these meetings, study team obtained
data and information from Iraqi side.
Furthermore, the local partners (companies formed by former industry executives and
government officers in Iraq) were appointed by the Japanese consortium and they were
engaged in such activities as collecting the needed information, visiting the plants, keeping
the records, taking photographs, and holding interviews with key persons in Iraq, which
enhanced the scope of the study.
1
Summary
2. The Mid-Western Iraq, consists of three governorates, is the focal region of the study. As
shown in the following table, Al-Anbar governorate is far bigger than the other two, although
the majority area consists of the Syria Desert, with limited residential areas and hence a low
population density.
Table 1: Basic data of Iraq

Iraq Al-Anbar Karbala An Najaf Mid-Western total
2
Land area (units of 10,000km ) 43.74 13.82 0.5 2.9 17.2
Land ratio% 100 32 1.2 7 39
Population
2,895 149 57 93 299
(units of 10,000 persons)
Population ratio% 100 5 2 3 10
Population density
2
66.2 10.8 114 32.1 17.4
(persons/km )
Population density indicator 1.0 0.16 1.7 0.5 0.26
(Source: UN Statistics 2008)
It has been considered that there is a few possibilities of oil and gas reserves in Al- Anbar.
On the contrary it is rich in phosphate rock. The existence of at least 500 million tons of
phosphate rock has been proven and the State Company for Phosphate (SCP) produces
phosphate fertilizers by utilizing the resources to satisfy domestic demand. In other words,
it is the sole producer of phosphate fertilizers in Iraq. However, for the last two decades, the
actual operation ratio of the facility has stayed very low, ranging from 15 to 20 % because of
many troubles. Furthermore, imports from neighboring countries such as Jordan have been
suspended due to a foreign currency shortage. Accordingly, it is easily considered that Iraqi
agriculture has suffered from the shortage of the important fertilizers.
However, phosphate fertilizers are necessary for main crops such as dates, a staple in Iraq and
(there are reportedly around 2.5 million date trees in Al-Anbar.) and a shortage of phosphate
fertilizers is also fatal for other crops (wheat, potatoes, barley, corn, etc.) Under these
conditions, Iraq has been obliged to rely on food aid from international organizations.
The Mid-Western Iraq is mostly covered by steppe and desert soil and there are only limited
kinds of crops.
Under these circumstances, water and fertilizers play critical roles. From the view point of
water intake, Al-Anbar is located in the beneficial area because it is relatively close to the
Euphrates. However, the operation rate of the fertilizer plant has been poor, ranging from
only 15 to 20% of capacity for various reasons.
2
Summary
The SCP Complex (Akashat Phosphate Rock Mine and Al-Qaim Chemical Fertilizer
Complex Plants), which is a key industrial production base in Al-Anbar, is expected to
recover its production capacity very soon.
3. There are 68 state-owned companies under MIM management. These include food, textile,
chemical, ceramics, construction and engineering sectors.
The state companies and industries in the following governorates are expected to be
recovered their production capacity sooner than others:
(1) Basrah Province (Kohr Al-Zubair) - steelmaking plant

(State Company for Iron & Steel)
(2) Anbar Province (Ramadi) – glass and ceramic factory

(State Company for Glass & Ceramic Industry)
(3) Maysan Province/Ninavah Province (Mousl) – sugar factory

(State Company for Sugar Industry)
(4) Baghdad, etc. – tobacco factory

(State Company for Tobaccos & Cigarettes)
(5) Ninavah Province (Mishraq) - sulfur compound plant

(Mishraq Sulphur State Company)
(6) Anbar (Al-Qaim) - phosphate fertilizer plant

(State Company for Phosphate)
(7) Qadisiya Province (Diwanyia) – rubber and tire product factory

(State Company for Rubber Industries)
(8) Najaf Province (Haidariyah) – tire product factory

(State Company for Tire Industries)
(9) Basrah Province/Maysan Province – paper product factory

(State Company for Paper Industries)
(10) Babil Province – dry cell factory

(State Company for Batteries Industries)
(11) Textile factory
(12) Cooking oil factory
3
Summary
4. It is repeatedly stated in The National Development Strategy (2007-2010)1 that the mining
and industrial sector is vital next to of oil and gas and that its recovery is very critical for the
country. Following countermeasures are shown in the strategy of MIM.
Revitalizing the private sector is the important issue for the reconstruction and development
of Iraq. With this importance in mind, the government of Iraq is striving to create a
condition and framework which facilitate private sector to participate, more specifically, the
government is tackling efforts to improve security, establish legal systems, and improve the
remittance scheme and other aspects of the financial sector.
As previously described, the mining and manufacturing sector has many State-owned
Enterprises (SOEs.) Because they are moderate in size and often in relatively downstream
industries, they can be operated independently. Thus, the barrier for private capital to
participate is fairly low. In fact, the Ministry of Industry and Minerals has launched a policy
to maximally tap private capital in reconstructing and developing the mining and
manufacturing sector. Again, the sector will play a vital role in this aspect as well.
As shown in the following table, when calculated based on the viewpoint of “fulfilling the
basic needs of the Iraqi people”, the required investment amounts for the Mining and
Manufacturing sector were under-estimated in 2002. The lower priority given to the mining
and manufacturing sector, however, does not mean that the sector was considered
insignificant. On the contrary, its importance is expected to heighten as the country’s
economy regains its footing for reconstruction. The following provides the rationales for
this interpretation, as seen in the National Development Plan:
Table 2: Estimated Amount of Investment Needed by Sector (calculated as of 2002)

(billion U.S. dollars)
Four-year
Sector 2007 2008 2009 2010
total
Oil and gas 8.4 8.7 9.3 9.6 36.0
Electricity 6.0 4.4 3.5 2.6 16.5
Water resources 1.0 1.5 1.5 1.2 5.2
Agriculture 1.1 1.0 1.0 1.0 4.1
Industry
0.3 0.2 0.2 0.1 0.8
(and mining & manufacturing)
Transport 7.5 7.5 7.5 7.5 30.0
Construction 1.5 1.5 1.5 1.5 6.0
Housing 10.0 12.0 15.0 15.0 52.0
Insurance 2.5 3.3 4.4 4.5 14.7
Education 0.6 0.6 0.6 0.6 2.4
Communications 0.3 0.3 0.2 0.2 1.0
Public sanitation 1.4 1.9 2.0 2.7 8.0
Regional development 2.5 2.5 3.0 3.0 11.0
All sectors 43.1 45.4 49.7 49.5 187.7
(Source: “The National Development Strategy (2007-2010)” released by the Government of Iraq)
1
Republic of Iraq, Ministry of Planning and Development Cooperation
4
Summary
5. The following directions for reconstruction policies for the Mining and Manufacturing sectors
beyond 2010:
・ Reconstruct SOEs by laying new production lines and thereby improving productivity.
・ Reconstruct companies and plants in accordance with the market principles.
・ Expand the scope of roles to be assumed by the private sector in developing the national
economy and allow the private sector to lead the Mining and Manufacturing sector to a
high-value added industry.
・ Enact the provision of soft loans to foster small- and medium-scale industries, develop
industrial zones and cities, and projects under planning.
・ Introduce modern technologies into the Mining and Manufacturing sector by partnering
with global corporations employing cutting-edge technologies.
・ Improve and expand research facilities and institutes in collaboration with the Ministry of
Science and Technology.
・ Intensify geographical and mineral resources surveys to identify the available natural
resources.
・ Identify high-value added and competitive industries and attract investment from within
and outside the country.
・ Create “investment maps” based on available natural resources and competitive

advantages, in collaboration with local governments, thus promoting the establishment of
new industries by harnessing domestic and foreign investors’ funds.
・ To arrange the laws to realize an investment climate appropriate for domestic and foreign
investors as well as laws on consumer protection and antimonopoly.
6. The following is an overview of the mining and manufacturing sector in Mid-Western Iraq:
As for the mining resources, Al-Anbar Governorate has very little production of such
resources as crude oil and natural gas that are abundantly yielded in the country. Recently,
however, natural gas reserves are confirmed in the Akaz region located near Al-Qaim in the
province.
At present, major minerals yielded in the Mid-Western Iraq, mainly in Al-Anbar Governorate,
are abundant phosphate rocks that mostly concentrate in Akashat and silica sand, limestone,
argil and clay that are produced in the desert area. In Al-Anbar Governorate, these resources
are utilized as raw materials as follows: the former for phosphate fertilizers and the latter for
cement, glass and ceramic industries.
5
Summary
The phosphate fertilizer and glass production in the Governorate are highly valuable because
they are the only production site in the country. However, the mining and manufacturing
sector in the Mid-western region accounts for a very small portion of all industries in Iraq.
The following is an overview of the current conditions of the major industries described
above.
The state-run glass and ceramic company in An-Anbar Province totally dominates the glass
industry in Iraq. An overview of the company and its equipment and products are described
below.
Company name : State Company For Glass & Ceramic Industry (hereafter SCGC.)
Location : Al-Anbar, Ramadi Beside Warar Bridge
No. of employees : 2,387 as of 2006 (including 2,162 and 225 in the production and
administration segments respectively.)
2,905 as of 2009
History : Since being founded as a flat glass producer in 1970, SCGC has been
expanding its business to include floor tiles, sanitary ware and other
ceramics, glass bottles and tableware glass.
(1) Current operational status
1) Facility currently under operation : Equipment for floor tiles, sanitary ware
2) Facility slated to begin operation soon : Equipment for wall tiles, glass panes for
windows, and glass bottles for medicine
3) Facility whose operation is discontinued due to ageing:
Equipment for glass bottles, glass jars, tableware
glass, and sodium silicate
(2) Plant overview
1) Floor tile plant:

① New plant that began operation in 2002. The floor area is 35,000 m2.
② Built by an Italian construction company.
③ The current production capacity is 1,000,000 m2 per year, which can be increased
with slight modification.
④ Produces 30-centimer square floor tiles in various shapes and colors.
⑤ 100 percent of argil used as a raw material is domestically procured.
6
Summary
2) Sanitary ware plant:

① A new plant that began operation in 2002. The floor area is 35,000 m2.
③ The current production capacity is 5,000 tons per year, which can be increased with
slight modification.
④ Produces toilet bowls and cesspits in various shapes and colors
⑤ 40 percent of argil used as raw materials is domestically procured.
3) Wall tile plant:

① Currently being reconstructed under the leadership of a Lebanese company. The
2
operational launch is slated for 2007. The floor area is 35,000 m .
② The planned production capacity is 1,250,000 m2.
③ 100 percent of argil used as raw materials is domestically procured.
4) Sheet glass plant:

① Currently being reconstructed under the leadership of three Italian companies.
Machines and materials for the works are from Europe. The floor area is 25,000 m2.
② The planned daily production of transparent and figured sheet glass is 120 tons.
③ Approximately 2.2 billion Iraqi Dinars (approximately 15 million dollars) is needed.
5) Medical glass bottle plant:

① Currently under restoration. The major equipment necessary for the works,
including heat-resistant fusing furnace and others, is from Italy or India.
② Because high profitability is anticipated, there are hopes for an operational relaunch.
③ The production capacity is 40,000 m2. Medical bottles are produced by modifying
regular glass bottles (for which special equipment is required.)
④ Major customers are pharmaceutical companies.
6) Tableware glass plant:

① Production has been suspended since 2003 due to the ageing of equipment. The
facility needs to be replaced and repaired to restart operation. The company hopes
to restore the plant.
7
Summary
② There are four fusing furnaces, each of which has a daily production capacity of 35
to 45 tons. The floor area is 25,000 m2.
③ Products produced here include flat-bottom water cups, tea cups, plates, saucers, big
salad bowls and ash trays.
7) Glass bottle and jar plant:

① The production has been suspended since 2003 due to the ageing of equipment.
The fusing furnaces of all lines must be replaced and repaired to restart operation.
The company hopes to restore the plant.
③ The products produced here include various wide- and small-mouth glass bottles.
8) Sodium silicate plant:

① Production has been suspended since 2003 due to the ageing of equipment. The
fusing furnaces of lines need to be replaced and repaired to restart operation. The
company hopes to restore the plant.
② There is one fusing furnace, with a daily production capacity of 30 tons. The floor
area is 10,000 m2.
③ Products produced here include solid and liquid sodium silicate.
(3) Advantages of SCCG
① Domestic and overseas demand can be expected.
② The production cost is reasonable because approximately 80 percent of raw materials

can be obtained from the Anbar Desert.
③ There is good water transportation as it is located near the Euphrates.
④ A location near Jordan, Saudi Arabia and Syria means it is close to markets.
(4) SCGC’s project plans
SCGC intends to implement the following major facility investment projects:
8
Summary
Table 3: Glass Sector Project

Project name Estimated Installation Ratio of Estimated no. of
investment capacity domestically-procured employees
raw materials
million dollars tons/day %
Sheet glass 150 450 80 600
Lead crystal glass 15 6 65 100
(Source: SCGC document)
Table 4: Ceramic Sector Project

Project name Estimated Installation Ratio of Estimated no. of
investment capacity domestically-procured employees
raw materials

Ceramic tableware 7 15 60 150
Red bricks 10 30 100 100
Ceramic insulator 10 2 60 80
Glaze for ceramics 7 18 60 100
Kaoline 7 40 100 100
Cement Industry
There are three cement companies in Iraq. There are also two other companies that deal
with construction materials such as refractory bricks and gravel with properties similar to
cement.
(1) Iraqi State Company for Cement
1) History, etc.:
① It was established in 1936 in Baghdad and production began with a wet kiln in
1949. As of 1995, there were four plants.
② Employment: 2,867 (2,300 in production and 567 in administration)
③ Products: regular cement, acid-proof cement, white cement
9
Summary
2) Plant overview
Table 5: Facility of the Iraqi State Company for Cement
Plant name Product Design capacity Actual capacity Others
(ton/year) (ton/year)
Kubaisa Regular cement 2,000,000 1,500,000 Located in eastern end of Al-Anbar
Kirkuk Regular cement 2,000,000 1,500,000
Al-Qaim Acid-proof 500,000 500,000 Located in western end of Al-Anbar

cement
Falluja White cement 290,000 218,000
Kubaisa paer sacks 30 million sacks not available
Kirkuk paer sacks 30 million sacks not available
Bagdad paer sacks 15 million sacks not available
(Source: 2006 document of the Iraqi Ministry of Industry and Minerals)
The Kubaisa plant (west of the provincial capital of Ramadi and Heet) was built in
1981 by Kawasaki Heavy Industries. It has an annual production capacity of two million
tons, the largest in Iraq. Although it is still operational, there are management, technical
and maintenance problems.
The Al-Qaim plant was built in 1981 with Rumanian know-how and machinery. The
plant has various technical problems and the Ministry of Industry and Minerals is leasing
the facility to a private investor.
3) Current problems
The operation rate in 2002 was as low as 48%, due to management, technical and
maintenance problems, the ageing facility and a lack of major parts. There is awareness
of the need for overall rehabilitation. An estimated total exceeding one million dollars is
needed to regain the original design capacity.
(2) Iraqi State Company for Northern Cement
1) History, etc.:
① It was established as Al Rafideen Cement Company in 1953 in Badoosh in
northern Iraq. It later merged with the Hammam Alalil Cement Company in
1964 to form the Mosul Cement Company, the predecessor to the present-day
SOE. Although the scope expanded to operate 10 plants by 1984, only seven are
operational today.
② Products: regular cement, acid-proof cement, etc.
10
Summary
2) Plant overview
Table 6: Facility of State Company for Northern Cement
Badoosh (phase 1) Regular cement 192,000 not available

Sinjar Regular cement 1,152,000 not available
Hammam Al-Alil (phase 1) Regular cement 218,000 not available
total 3,579,000
(Source: 2006 document of Iraqi Ministry of Industry and Minerals)
(3) Iraq State Company for Southern Cement
1) History, etc.:
① It was established in 1995 in Al-Ashraaf in Najaf Province in southern Iraq. It
has eight plants. The major market is southern Iraq.
② Employment: 5,793 (4,528 in production and 1,265 in administration)
③ Products: regular cement, acid-proof cement, etc.
2) Plant overview
Table 7: Facility of State Company for Southern Cement
Plant name Product Design capacity Actual Others
(ton/year) capacity
(ton/year)
Kufa (New) Regular cement 1,800,000 not available
Karbala Regular cement 2,000,000 not available
Muthana Regular cement 2,000,000 not available
South Cement Regular cement 450,000 not available
Om Qaser Regular cement 400,000 not available
Najaf Regular cement 208,000 not available
Al Sada Regular cement 200,000 not available
Al Semawa Regular cement 450,000 not available
Al Noora Regular cement 200,000 not available
Total 7,708,000
Details of current company operations are unknown. According to the corporation’s

information, overall rehabilitation and staff training are needed to regain the original
11
Summary
design capacity of the plants.
(4) Iraq State Company for Refractoriness Industry
1) History, etc.:
① It was established in 1994 in Falluja near Baghdad to produce refractory bricks
and other refractory products.
② Employment: 696 (596 in production and 100 in administration)
③ Products: refractory bricks and other refractory products
Chemical fertilizer industry

The only phosphate fertilizer production base in Iraq is located in one of the three
governorates in Mid-Western Iraq.
SCP is the only fertilizer production base in the three governorates and thus vital for their
regional economy and society. The production site is also crucial as the sole supplier of
phosphate fertilizers in Iraq. However, the company is facing problems mainly due to the
extended period of wartime and the feasibility of SCP recovery is another main issue in the
study.
7. The current circumstances of the three major industries in Mid-Western Iraq, mainly
Al-Anbar, are described above. Meanwhile, the supply-demand situation for chemical
fertilizers, which is a major focus of the Preliminary Feasibility Study, is described below.
A market analysis of the chemical fertilizer industry in Iraq was implemented as a
cornerstone of the Preliminary Feasibility Study. The following is a summary of the
results:
12
Summary
1) Production Trend
Table 8: Production Trend of Chemical Fertilizer Industry in Iraq (Ammonia, Urea)

Location, Time of
Design Production Capacity Major Raw Materials Operation Trend
Establishment
(Ammonia, urea)
In 1980, the Iran-Iraq War broke out and
Plant No. 1 Ammonia: 200 t/d (66,000 t/y) Natural gas is it caused serious damage to production
Basra Urea: 160 t/d (52,800 t/y) supplied from North facilities. The opeation has been
(Abu-Al-Khaseeb) Ammonium sulfate: Rumaila Oil Field via competely suspended since 1980.
1969 420 t/d (138,599 t/y) a pipeline. Parts that can be used elsewhere were
supplied for Machine No. 3.
Plant No. 2
Basra Ammonia: 800 t/d (264,000 t/y)
Same as above Same as above
(Abu-Al-Khaseeb) Urea: 1,300t/d (429,000t/y)
1978
it caused serious damage to production
facilities. The opeation was suspended
Natural gas is
Plant No. 3 Ammonia: 1,000 t/d 2 lines after the outbreak. Production resumed
supplied from South
Basra (660,0000 t/y) in March 1988 immediately after the end
and North Rumaila
(Khur Al-Zubair) Urea: 1,600 t/d 2lines of the war. Although Gulf War II and
Oil Fields via a
1978 (1,056,000 t/y) later wars did not cause serious damage,
pipeline.
operation rate is low due to shortages of
parts and catalysts, at around 28 percent
in the case of urea, for example.
Ammonia: 1,000 t/d Natural gas is It is hard to conduct stable operation due
Plant No. 4
(330,000 t/y) supplied from Kirkuk to shortages of natural gas and electricity.
Baiji
Urea: 1,750 t/d Oil Field via a This has resulted in suspension of
1987
(577,500 t/y) pipeline. operation since April 2003.
Note
Urea: Total of design production capacity 2,115,300 t/y
Production volume in 2009 307,400 t/y (14.5 %)
(Source: Compiled by the Study Team based on various materials)
13
Summary
Table 9: Production Trend of Chemical Fertilizer Industry in Iraq (Phosphate fertilizer)

Location, Time of
Establishment
(Phosphate fertilizer)
Phosphate rocks are
transported by rail from
Although the Iran-Iraq War did not
Akashat Mines 170 kilometers
cause much damage, furious
Phosphate rocks: to the west. Sulfur is
airstrikes by allied forces in Gulf War
3.4 Million t/y transported from Mishaqyori
II caused tremendous damage to the
(22% P2O5) Sulfur Mine and oil refineries in
Plant No. 1 production facility. After that, it
TSP: 600,000 t/y the country. Natural gas to
Al-Qaim reduced the operation rate
(45% P2O5) produce ammonia is supplied
Akashat drastically. Furthermore, Gulf War III
MAP: 280,000 t/y from Kirkuk Oil Field via a
1976 in 2003 also caused more damage
Chemical fertilizer: pipeline.
and currently it hardly functions as a
NP 655,000 t/y However, the ammonia plant
production plant. It is inevitably in a
Ammonia: 50,000 t/y has completed closed since
situation where it needs to plan and
1990 and liquefied ammonia is
examine the rehabilitation.
transported from a fertilizer
plant in Baiji by tank truck.
＊ The chemical fertilizer plants constructed in Iraq are shown in the above table. All
the production facilities are owned by state-run companies.
＊ Use of ammonia:
World supply-demand balance: Approx. 80% for fertilizers and 20% for other
industrial uses
Iraq: Mostly for fertilizers. Both Basra and Baiji plants consume most of the
ammonia they produce for the production of urea. Although ammonium sulfate
was produced with Machine No. 1 at Basra, the operation has been completely
suspended. Although the Al-Qaim plant used to produce ammonia for MAP
production, the production is now completely suspended. Ammonia is now
transported from the Khor Al-Zubair plant in a special container (tank truck-type
cargo).
2) Operation of Iraqi fertilizer plants:
As for production, the Khur Al Zubair plant in Basra manages to maintain 30% level of
operation rate. However, the rate of the Baiji plant in the northern part dropped sharply in
2003 (67.7% in 2002 to 16.2% in 2003) and has been zero since 2007. This is mainly
because the gas pipeline was frequently damaged and caused shortages of supply of natural gas
that is a raw material of the fertilizers. In 2005, it had no supply of natural gas for eight and
nine months. Furthermore, there is a power supply problem, which has led to zero production
since 2007.
14
Summary
Table 10: Production and Demand Balance of Urea in Iraq
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
(Production)
Baiji Factory 209,299 252,256 235,214 203,594 392,200 93,881 76,121 58,149 10,795 0 0 0
(Capa；579,000 tons) Ope Rate% 36.1 43.6 40.6 35.2 67.7 16.2 13.1 10.0 1.9 0.0 0.0 0.0
Basra Factory(Khur Al Zubair) 388,503 454,308 454,701 554,811 597,661 99,167 262,713 226,744 300,907 232,253 300,235 307,409
(Capa；1,056,000 tons) Ope Rate% 37 43 43 53 57 9 25 21 28 22 28 29
Total 597,838 706,608 689,956 758,440 989,929 193,064 338,847 284,903 311,704 232,253 300,235 307,409
(Total Capacity 1,635,000 tons）
Total Operation Rate% 36.6 43.2 42.2 46.4 60.5 11.8 20.7 17.4 19.1 14.2 18.4 18.8
(Sales)
Baiji Factory 190,427 223,635 268,373 183,992 369,900 161,895 53,551 70,468 18,299 4,171 0 0
Basra Factory (Khur Al Zubair) 414,025 449,015 384,601 658,610 572,307 134,208 225,130 258,196 302,602 220,554 311,662 293,040
Total 604,452 672,650 652,974 842,602 942,207 296,104 278,680 328,664 320,902 224,725 311,662 293,040
(Breakdown of the Sales)
1) Sales to MOA
From Baiji Factory 159,428 144,360 64,506 109,855 185,855 40,876 38,984 58,468 7,777 3,200 0 0
From Basra (Khur Al Zubair) 335,061 298,549 73,881 216,888 353,533 82,496 190,192 246,677 299,698 220,001 302,900 267,091
Total 494,489 442,908 138,387 326,743 539,388 123,371 229,176 305,145 307,474 223,201 302,900 267,091
2) Sales to PS
From Baiji Factory 7,231 16,837 46,908 3,670 13,438 108,055 5,933 0 0 0 0 0
From Basra (Khur Al Zubair) 3,240 33,638 116,773 100,491 18,207 30,115 32,665 710 0 400 0 0
Total 10,471 50,474 163,680 104,161 31,645 138,170 38,597 710 0 400 0 0
3) Sales for Export
From Baiji Factory 6,942 7,359 51,796 20,351 86,386 10,614 0 0 0 0 0 0
From Basra (Khur Al Zubair) 13,782 68,221 135,039 253,140 116,759 6,491 453 0 0 0 3,328 0
Total 20,724 75,580 186,835 273,491 203,145 17,104 453 0 0 0 3,328 0
4) Sales to SCP
From Baiji Factory 12,411 20,378 16,049 9,981 34,464 884 321 10,312 10,523 971 0 0
From Basra (Khur Al Zubair) 58,749 46,192 55,622 84,612 81,109 15,107 0 0 2,855 89 5,000 25,904
Total 71,160 66,569 71,671 94,593 115,573 15,992 321 10,312 13,378 1,060 5,000 25,904
5) Sales to Others
From Baiji Factory 4,415 34,702 89,114 40,136 49,757 1,466 8,313 1,687 0 0 0 0
From Basra (Khur Al Zubair) 3,193 2,417 3,286 3,479 2,700 0 1,820 10,810 50 64 434 45
Total 7,608 37,119 92,400 43,615 52,457 1,466 10,133 12,497 50 64 434 45
(Source: Compiled by Study Team based on document of Ministry of Industry and Minerals)
The above table is also shown in the figures below to facilitate understanding.
Iraq Urea Production

1,200,000
1,000,000
800,000
Tons
600,000
400,000
200,000
0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Year
Baiji 　Factory Basra Factory Total
Figure 1: Trend of Urea Production by Plant in Iraq

15
Summary
3) Phosphate fertilizer demand
-1. General remarks
For the cultivation of the crops, nitrogen, phosphate and potassium are considered as the
most important nutrients. Each nutrient has its own characteristics and uses.
Quantitatively, phosphate fertilizer is the second largest fertilizer next to nitrogen.
As for the uses and the effectiveness of phosphate fertilizers manufactured by SCP,
including Triple Super Phosphate (TSP), Mono-ammonium Phosphate (MAP) and NP
(Compound fertilizer), are as follows;
TSP is suitable for acid soil, volcanic ash soil and soil improvement of poor soil. It
dissolves and is absorbed in the organic acid in root crop. It has a slow-acting effect.
Mix ratio of nitrogen and phosphorus in MAP is excellent and it is an essential fertilizer
for the growth in the early stage of various crops. It is also frequently used as the
intermediate as raw materials of compound fertilizers.
NP is suitable as base fertilizers for long-term crops (fruit vegetables, root vegetables and
flowers) and so on.
-2. Iraqi phosphate fertilizer plants
The Government of Iraq began the production of phosphate fertilizers at the Al-Qaim
plant in 1976. It is undoubtable that the government made the decision because a large
volume of phosphate rocks used as raw materials for the fertilizers can be produced in
Akashat approximately 170 kilometers southwest of Al-Qaim.
-3. Demand forecast of phosphate fertilizers in Iraq by accumulation method
It is not so easy to identify the demand of phosphate fertilizers in Iraq, because there are
many uncertainties, thus it requires the examination of various issues—correct
understanding of soil quality of cultivated land in Iraq, understanding of a careful plan of
what type of crop is produced where, consideration of alternatives to other types of
fertilizers, and demand for export in some cases. In this survey, as for these important
factors Study Team could not find effective data. Accordingly, it is very hard to obtain a
feasible demand forecast of Iraqi phosphate fertilizer based on such an accumulation
method.
-4. Demand forecast of phosphate fertilizers in Iraq by inductive method
Generally speaking, as shown in the table 5.2-3, it is experientially recognized that the
consumption ratio of three basic fertilizers has some specific relation. It is roughly
16
Summary
estimated that consumption ratio of phosphate fertilizer against nitrogen fertilizer ranges
from 30 to 40 %.
However, in the case of Iraq, phosphate fertilizer consumption ratio, actually 25% against
nitrogen fertilizer consumption, is lower than most other regions and countries.
Considering the similar weather and soil situations, Iraq’s figure should be closer to the
figures of total Middle East of 37% and Iran of 42%. Based on such inductive method, it
will be persuasive that Iraq will have to raise the consumption ratio of phosphate fertilizers
in future.
-5. SCP design capacity
The following shows the figures of SCP phosphate fertilizer design capacity and it has
probably been considered that these design capacity are roughly equal to the Iraqi domestic
demand because the Iraqi Government might have considered that the local demand should
be fulfilled by the local products. Actually, however, because of many troubles, real
production volumes were far below than these design capacity:
(Design Capacity) (Converted volume into P2O5)

TSP 600,000 tons (45% P2O5) 270,000 tons
MAP 280,000 tons (52% P2O5) 145,600
NP 655,000 tons (27% P2O5) 176,850
Total 592,450
-6. SCP operation results
Phosphate fertilizer production at the Al-Qaim plant was close to zero from around 2004
to 2006. Specifically, production of TSP and MAP was zero and NP was about 80,000 tons
(around 12% of design capacity) during the period. The shortage cannot be offset by the
importation mainly because of the shortage of foreign currency and the governmental policy
not to rely on the foreign products. .
The reality in recent years is that there was absolute produceable volume first and then
demand could not exceed it. This idea is clearly stated about urea fertilizers and it is fair to
say that the government took the same approach for phosphate fertilizers because there was
no importation of phosphate fertilizers recently.
4) Restoration of Al-Qaim complex v.s. New construction
What are the prevailing conditions of restoring Al-Qaim Complex over building new
complex at other location?
17
Summary
-1. Economical condition:

Judging that restoring is more economical than new building.
-2. Existing utility supply facility availability (Water/Electricity/etc.):

So far meets the demand of plants and new power generation units are under placing
order
-3. Existing wastes handling facility availability (Gypsum/Waste water/etc.)

From Anti-pollution point of view, the currently applicable countermeasures are still
effective.
-4. Existing infra-structure (Road/Railway/etc.)

Not serious and those are still workable.
-5. Work force availability (for operation/maintenance)

SCP Al-Qaim has kept enough manpower to execute the project. If in other location it
is more difficult to obtain workforce and it will be more costly.
-6. Feedstock delivery conditions (other than phosphate rock)

So far there is no significant difference due to the availability of rail and road.
-7. Other conditions / restrictions, if any.

Difficulties of relocation of housing complex and not better life conditions.
Accordingly to the above clarification it was recognized that SCP in Al-Qaim has taken the
possible maintenance actions at minimum level in the way of national budget allocation, then
they have considered that the rehabilitation of the existing facilities is the shortest way to
materialize the restoration of production capacity.
8. The SCP Complex consists of the Akashat Phosphate Rock Mine and the Chemical Fertilizers
Complex in Al-Qaim. The following is an overview:
(1) Current SCP Status
SCP is a state-owned company that was established in 1976 with a capital of 3.5 million Iraq
dinars (approx. 2.8 million yen at current exchange rates). It has been managing phosphate
rocks in Akashat and a phosphate fertilizer complex in Al-Qaim. The company’s products
(including intermediate products) include sulfuric acid, phosphoric acid, and phosphate
fertilizers such as TSP (Triple Super Phosphate) and MAP (Mono-Ammonium Phosphate),
chemical fertilizers (NP and NPK). Fluorine salt is also produced as a by-product. A basic
18
Summary
overview of SCP is as follows:
Establishment: 1976
Commencement of commercial operation: 1983
Initial self-owned capital : 350 million Iraq dinars (approx. 28 million yen at current
exchange rates)
Authorized capital : 7,358 million Iraq dinars (approx. 600 million yen at current
exchange rates, as of 2006)
Number of employees : 2,916 as of 2006
Business contents : Production of phosphate rocks in Akashat
Production of chemical fertilizers and intermediate products
in Al-Qaim Complex
Turnover (of 2009) : 29,961 million Iraq dinars (approx. 2,400 million yen at
current exchange rates)
(2) Overview of SCP Facilities
1) Phosphate rock (Unit-900): Annual production 3.4 million tons

(Concentration is 22% of P2O5. Phosphate rock is mined in
Akashat, 170 km west-southwest of Al-Qaim. The
proven reserves of phosphate rock are approx. 0.5-0.7
billion tons and the estimated reserves are approx. 3-4
billion tons. All phosphate rock are transported to the
Al-Qaim plant by rail.)
2) Beneficiation unit (Unit-100): Annual production 1.7 million tons, 2 lines

(The concentration of P2O5 delivered from Akashat is
enriched from 22% to 30%. This process and all
processes after this are carried out in Al-Qaim.)
3) Sulfuric acid production plant (Unit-200):

98.5% sulfuric acid, annual production 1.5 million tons
(Has a daily production capacity of 1,500 tons with 3 lines.
Sulfur used for production is delivered from Mishraq
Sulfur Mine in Mousel and oil refineries in the country.)
4) Phosphoric acid production plant (Unit-300):

Liquid phosphate of 54% P2O5, annual production 0.83
million tons
19
Summary
(Has a daily production of 1,260 tons with 2 lines.

Materials are phosphate rock and sulfuric acid.)
5) Ammonia production plant (Unit-451): Annual production 50,000 tons

(Natural gas used for this production is supplied via a
pipeline from Kirkuk, in the north of Iraq. However, the
plant has been shut down since 1990 and thus liquid
ammonia is currently transported by tank truck from a
fertilizer plant in Baiji.)
・Fertilizer production plant:
- TSP (Triple Super Phosphate)
Total annual production of 600,000 tons (45% P2O5 concentration) with 2 lines
- MAP (Monoammonium Phosphate)

Annual production of 280,000 tons with 1 line (52% P2O5 concentration, 11%
nitrogen concentration)
- Compound fertilizer (NP and NPK)

NP and NPK: Annual production of 655,000 tons with 2 lines
Because potassium fertilizers are rarely needed due to the
properties of the Iraq soil, the plant mainly produces NP.
・Sodium fluorine production plant: By adding and reacting aluminum hydroxide with
fluorosilicate that is a byproduct of phosphoric acid
produces sodium fluorine. The product is used as
an alternative to zeolite, mainly for detergent
manufacturing. However, the plant is hardly
operated due to manufacturing technical problems.
・Utility infrastructure: Power generator - design capacity 34.8MW (2 diesel

power generators, 2 steam turbine generators;
currently only 1 diesel generator is operated.)
Water intake facility ‐180,000M3/d. (from the
Euphrates)
Compressed air ‐144,000 M3/d. Wastewater
treatment installation
20
Summary
3) Production Trend
The production trend of the last 27 years from initial operation to the 2009 SCP is shown in
the following figure:
SCP　Product-wise Production Result (tons)

1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
83
85
87
89
91
93
95
97
99
01
03
05
07
09
19
19
19
19
19
19
19
19
19
20
20
20
20
20
TSP MAP NP & NPK Phosphoric Acid Sulphuric Acid
Figure 2: Trend of SCP Production Volume by Product

(Source: Compiled by Study Team based on SCP document)
Table 11: SCP Activities

Average of production Average of production and
and sales volumes for sales volumes for 27 years
27 years Ratio of design capacity
(ton/year)
Production
TSP 130,713 21.8%
volume
(Design capacity 600,000 tons)
Sales volume 131,714 22.0%
Production
MAP 48,846 17.4%
volume
Production
NP&NPK 207,391 31.7%
volume
Production
Phosphoric Acid 86,839 21.7%
volume
Sales volume
Sulphuric Acid Production
342,165 22.8%
(Design capacity 1,500,000 volume
tons) Sales volume
21
Summary
4) The figure below shows the overall production process of the SCP Complex.
AKASHAT
Mine U-900
20% p2o5 Utility

Beneficiation U-620 Ammonia
U-100 U-451 P.Air
30% p2o5 I.Air
To All Units
Sulfuric Acid T.R.Water
Phosphoric Acid
Gypsum Stack U-２０0
U-300 H2SO4 98% C.Water
Urea N.Gas
KCl
P2O5 54% Raw Material M.P.steam
Handling U-661 L.P.Steam
Fluosillicic Acid (H2SIF6)
El
Fertilizer （Raw Material）
U-４00 El.Power
Aluminium Hydroxide
TSP NP NPK MAP
Store
Store
Fluorine Salts Aluminium Fluoride
U-500
Figure 3: Overall Process Flow of Al-Qaim Phosphate Fertilizer Complex

(Source: Compiled by the Study Team based on SCP data)
5) The expected scale of the rehabilitation plan of SCP’s Al-Qaim plant is shown in the
following table.
Table 12: SCP’s Rehabilitation Goal

Design production capacity Production target
Product
TSP 600,000 540,000 (90%)
NP 655,000 589,500 (90%)
MAP (interim product) 280,000 252,000 (90%)

Total 1,255,000 1,129,500 (90%)
(Source: Investment File by SCP)
9. SCP’s rehabilitation plan was objectively examined from the standpoint of private investors.
The following points were identified as possible obstacles.
(1) Public safety in Iraq
Public safety in Iraq is yet to be satisfactory enough for many private companies to
participate in project in the country. Further improvement of public safety is a minimum
22
Summary
condition to be met for overseas private investors to participate in projects in Iraq.
(2) Technical difficulty of rehabilitation plan
As mentioned in Chapter 6.2, Al-Qaim Complex has not performed sufficient maintenance
due to lack of spare parts and funds for a long time and facilities are seriously damaged. The
rehabilitation project with maintaining the current facilities as much as possible is predicted to
be very difficult technically and there will not be many contractors that will perform the duty
on site.
(3) High production target of rehabilitation plan
Although the operation rate of Al-Qaim Complex was once somewhere between 85 and 89%
around 1989, it has been low since then. Investors are committed to recovering the rate to
90%, which is a very ambitious goal.
(4) Huge investment
Partly because many facilities need to be replaced or repaired, the rehabilitation of the
complex requires a huge fund. The quotation SCP produced by itself is based on a quotation
by a supplier around 2007. The amount needs to be reexamined.
(5) Commitment during project term
The operator needs to commit itself during the term until the operation rate reaches the
target level of 90%. It is difficult to estimate how long the rehabilitation project will require
for various reasons. If a penalty is imposed when the project cannot be completed within the
period, this is a severe condition for investors.
(6) Unstable domestic market
SCP products are purchased at a stable price with the subsidy from the Ministry of
Agriculture. Investors are very interested in whether the subsidy program will be applied and
whether the subsidy program may be revised at some point.
(7) Difficulty in product exportation
Exportation of products of Al-Qaim Complex has a disadvantage of transportation cost

because it is located inland. Competition with neighboring countries with phosphate rocks is
also a matter of concern.
Taking these obstacles into consideration, it must be noted that it is fairly difficult for SCP to
23
Summary
attract private investment based on this Investment File.
10. Social and environmental impacts

It is said that the land area of Iraq can be roughly divided into four major geographical zones
as follows.
-Desert plateau: It locates on Mid-Western Iraq to occupy about 40% of Iraqi territory.
-Northeastern highlands: It occupies about 20% of the country territory.
-Northwest upland region: About 10% of Iraq territory
-Alluvial plain: Deltas of the Tigris and Euphrates Rivers to occupy 30% of Iraq
The major part of land area of 3 Governorates in Mid-Western of Iraq, where the possibility
of industrial rehabilitation project is surveyed, consists of both side of the Euphrates River
and huge area of desert plateau geography at west of the Euphrates River. The most of
inhabitants live on the banks of the Euphrates River. The desert plateau in this region
consists of a broad, stony plain with scattered stretches of sand, and sparsely inhabited by
pastoral nomads. A network of seasonal watercourses, so called wadis, runs from the
country’s western borders towards the Euphrates River. The density of industrial activities
in this region is not so high that the environmental issues brought by industries might be
rather mild.
However, virtually new units are likely to be built as part of the Al-Qaim rehabilitation
project. Damage to the current plant caused considerable leakage of sulfuric acid and
phosphate liquid, resulting in soil contamination. It is considered that the plant will have to
be relocated within the Al-Qaim Complex site.
Careful examination is needed in accordance with the environmental guidelines.
11. Study team’s considerations on rehabilitation project derived from the Preliminary
Feasibility Study are summarized as below:
With regard to the production facilities at SCP, most of them were heavily damaged or
deteriorated by aging, which brought about the lost of the production capability. However,
for the Iraqi agriculture in future, the importance of compound fertilizers together with the
improvement of irrigation systems is seriously recognized. Accordingly, the reconstruction
of Al-Qaim compound fertilizer facilities, the only production site of Iraqi phosphate
fertilizers, is considered as the most urgent project in the country.
24
Summary
As a conclusion, the Study Team considers that the rehabilitation of the existing facilities will
be more realistic rather than building new facilities through assessing the advantages and
disadvantages of each method. Actually, however, for the realization of the rehabilitation,
more detailed scope assessment will become necessitated because foreign corporations are
not be able to directly enter the country yet.
Therefore, under such situation, actual foreign activities will be limited in supplying main
production units, hardware and software of production management systems and training of
the workforce. As for existing maintenance staff amounting up to 800 persons, they should
be utilized for the actual execution of the rehabilitation project.
12. Discussion matters requested for the future Feasibility Study of the project
In order to bring about more effective results of the Feasibility Study of the project in future,
following issues should be made clear:
1) Data covering Iraqi fertilizer export and import figures in the past and forecast in future
2) Information on the alternative supply ability through import for Iraqi phosphate fertilizer
demand
3) Information on Iraqi Government agricultural policy in future( including the policies of
Ministry of Agriculture and Ministry of Water Resources)
4) Information on soil quality of cultivated land in Iraq
5) Information on crops cultivated in Iraq
6) More detailed information on demand forecast of phosphate fertilizer in Iraq
7) Information on the action plan compiled by MIM for the rehabilitation of SCP facilities
8) Possibility of installing the new phosphate fertilizer plant inside or outside Al-Qaim site
9) Information on the equipments urgently needed for the replacement in the case of
rehabilitation of SCP facilities
10) Accuracy of the investment cost already estimated by SCP in the case of rehabilitation of
SCP facilities
11) Necessity of technological cooperation
Accordingly, considering the above mentioned issues, it will urgently become important to
discuss more practical rehabilitation plan and set up realistic execution schemes.
25
Chapter 1
Background of the Project

1.1 Purpose of the Study
Iraq is one of the countries with biggest oil and natural gas reserves in the world.
Generally speaking, about 92 % of national revenues are generated by exportation of crude oil
and gas and their related products. However, oil production that once exceeded 3 million
barrels per day has been stagnant for recent years due to long-lasting wars and economic
sanctions. Oil and natural gas sectors are economic foundation of Iraqi economy and various
efforts for their recovery have been made rapidly after the end of the massive battle in Iraq War
in May 2003. National fund benefited from crude oil price increase and assistance from
international organizations are utilized for the recovery. Funds are distributed preferentially
to the rehabilitation and development of oil and natural gas sectors together with the
restoration of social infrastructure as priority issues.
Meanwhile, it can be envisaged that the Industry and Minerals sector formed by
manufacturing, construction and engineering industries has not received sufficient financial
support from the government or international organizations and the reconstruction process has
just begun. Having mentioned that, the sector consists of a variety of industries including
construction, engineering, petrochemical, textile, food and pharmaceuticals and industrial
services and it is believed to play a significant role in Iraq that intends to depart from excessive
dependence on oil and gas sector toward industry diversification. There are about 70
state-owned companies with a total of 180,000 employees in the Industry and Minerals sector.
Vitalization of the sector also has a significant meaning in terms of creation of employment.
Thus, the reconstruction and development of Industry and Minerals sector is an urgent task
especially in regions with little crude oil and gas resources. The three governorates of Anbar,
Najaf and Karbala in Mid-Western Iraq are one of such regions. The study focused on
chemical fertilizer sector in the Industry and Minerals sector in Mid-Western Iraq mainly in
Anbar Governorate to examine a scenario of future development of the industry based on
various conditions and make proposals to a project under planning for the Government of Japan
to use it in the examination of a future ODA loan project for the Industry and Minerals sector in
the region.
1.2 Contents and Method of the Study
The study contains the following items based on the purpose in 1.1:
・ Overview of Industry and Minerals sector in Iraq and confirmation of its standing in the
national development plan
1-1
・ Understanding of current conditions of Industry and Minerals sector, especially chemical

fertilizer sector, in Mid-Western Iraq mainly in Anbar Governorate
・ Market trend of chemical fertilizers and other major Industry and Minerals sector
products and development scenario of the sector in Mid-Western Iraq based on
international market trend
・ Analysis of operation and problems of the Al-Qaim plant for phosphate fertiliers, a major
industry in Anbar Governorate
・ Proposals to the project under planning by the State Company for Phosphate
・ Confirmation of challenges related to environmental and social considerations that may

arise if a project is implemented in Mid-Western Iraq
・ Reference to possobility of future ODA loan project based on the above
Many of the study contents require information from the Iraqi side and sufficient discussions
with Iraqi concerned organizations and state-owned companies were needed for the study.
However, because it was difficult for the Japanese study team to enter the country due to the
public safety problem in the unstable condition in Iraq, Iraqi counterparts were invited to
neighboring country of Jordan and Lebanon for discussions. A local partner that can enter the
country were hired for the field study of existing plants that require entry in the country. They
conducted interviews and took photos and videos while exercising sufficient caution about
safety.
1.3 Study Structure
Three Japanese companies formed a joint study team: Unico International Corp. with
abundant experiences in sector study all over the world, Mitsui & Co., Ltd. that conducts
overseas project development and marketing and investment activities in fertilizers and other
chemical products, and Toyo Engineering Corp. with abundant experiences in chemical plants
construction overseas, especially abundant experiences and expertise in chemical fertilizer
plants.
Because public safety in Iraq is yet to be ensured and thus it was difficult for the Japanese
study team to visit the existing chemical fertilizer plant that is one of the study items, Study
Team outsourced the task to a local partner with approval from the Japan International
Corporation Agency.
Iraqi counterparts are mainly formed by the section in charge of chemical industry sector in
the Ministry of Industry and Minerals, State Company for Phosphate that is a major target site
of the study, and the Anbar regional council. One official each of the Ministry of Planning
1-2
and Development Corporation and the Ministry of Finance also attended workshop meetings.
Iraqi counterparts are as follows:
(Ministry of Industry and Minerals)

Mr. Ali Mohammed Dhahir Head of Chemical Sector
Mr. Moyad Akif Hamad Expert in Chemical Industry
Mr. Riyadh Azeez Jasim Director General
Mr. Sumer Salman Shareef Rehabilitation Manager
(Anbar regional assembly)
Mr. Fezea Zaidan Khalaf Representative of Anbar Council
(Ministry of Planning and Development Corporation)
Ms. Elaf Dhia Al-Deen Industrial Planning Directorate
(Ministry of Finance)
Ms. Amal Jirjees Ahmed Chief of Borrowing Section, Public Debt Directorate 500
Figure 1.1-1 below shows the study structure of the Japanese study team and Iraqi
counterparts.
Figure 1.1-1: Study Structure

(Source: Compiled by the Study Team based on JICA data)
1.4 Study Schedule and Overview of Study Trip
1.4.1 Study Schedule
The study was conducted based on a business contract commissioned by the Japan
International Cooperation Agency on November 27, 2009. The schedule is shown in Figure
1.1-2 below.
1-3
Figure 1.1-2: Study Schedule

(Source: Compiled by the Study Team based on JICA data)
Because public safety remains a concern in Iraq, the study team did not carry out the field
survey in the country. Instead of that, Iraqi counterparts were invited to neighboring
countries of Jordan and Lebanon to have meetings. As mentioned earlier, because Stud Team
hired a local partner to conduct the field survey that requires entry into Iraq, a meeting to
report the field survey result that was not originally planned was held after the second meeting
as an alternative to the field survey.
1.4.2 Overview of Study Trip
Four study trips were made for the study including the participation in the workshop
meeting. Each study trip is summarized below.
(1) 1st meeting as an alternative to the field survey
The 1st meeting as an alternative to the field survey was held at Crown Plaza Hotel in
Amman, Jordan, for four days from the 21st to 24th of December 2009. All the 8 members of
the study team and 5 Iraqi counterparts attended the meeting where the study team introduced
the purpose of the study and study structure to the counterparts and requested them for
cooperation in the study.
Iraqi counterparts gave an overview of Iraq and the Industry and Minerals sector in
Mid-Western Iraq and explanations in response to the questionnaire sent earlier by the study
team. They also explained about the current condition and problems of the phosphate fertilizer
plant in Al-Qaim that is a major target site of the study. The study team sorted out the basic
information and requested Iraqi counterparts to provide local information, drawings, operation
1-4
conditions and statistic data of existing facilities several weeks before the second meeting as an
alternative to the field survey.
A meeting was also held with a local consultant that was the prime candidate in the result of
the bidding for selecting the local partner on the 25th of December 2009 at Mitsui & Co.,
Middle East Ltd. in Dubai, United Arab Emirates to reconfirm the purpose and structure of the
study and negotiate terms and conditions of the contract.
(Photo: a scene of 1st meeting as alternative to field survey)
(2) 2nd meeting as an alternative to the field survey
Prior to the 2nd meeting as an alternative to the field survey, a preliminary meeting was held
with the local partner at Four Points Hotel in Beirut, Lebanon, on the 23rd and 24th of January
2010. The local partner explained about the structure of the field survey and Stud Team
confirmed the contents of the survey Stud Team commissioned to the local partner based on the
information in the 1st meeting and information added by the Iraqi counterparts after the
meeting.
The 2nd meeting as an alternative to the field survey was held at Crown Plaza Hotel in
Amman, Jordan, for five days from the 25th to 29th of January 2010 attended by 7 study team
members and one observer from Tokyo Engineering Corp. from Japan side and 5 members who
attended the 1st meeting as Iraqi counterparts as well as one observer/interpreter from the local
partner.
In the meeting, an interim study report was given based on the 1st meeting results in
December, following assignment work in Japan and additional information provided by the Iraqi
counterparts, which was followed by exchange of views on the phosphate fertilizer plant in
Al-Qaim, phosphate rocks in Akshat and their surrounding infrastructure. Statistic and other
data yet to be confirmed in the 2 meetings but necessary to produce a final report was sorted out
in a list and the study team requested the Iraqi counterparts to provide additional information.
1-5
(Photo: a scene of 2nd meeting as alternative to field
(3) Feedback meeting of field survey by local partner
The field survey of the Al-Qaim phosphate fertilizer plant and Akshat phosphate rocks mine
was conducted by the local partner in early February after the 2nd meeting as an alternative to
the field survey, because it took relatively longer time to arrange the schedule of the recipient
of State Company for Phosphate and the local partner and obtaining permission for the visit.
A debrief meeting was held on the 1st and 2nd of March in Beirut, Lebanon, for the study team
to obtain feedback of the field survey from the local partner. The meeting was attended by 2
members of the study team and 7 members of the local partner.
In the meeting, the field survey result was confirmed with photos and videos and the local
partner reported the result of simple examination of each unit. The study team again requested
for urgent provision of additional information it had requested the Iraqi counterparts and the
local partner in the 2nd meeting.
(4) Workshop meeting
A workshop meeting was held on the 25th and 26th of March 2010 in Beirut, Lebanon, to
explain about the study result and discuss the future course of the development of chemical
fertilizer sector in Mid-Western Iraq based on the result. The meeting was attended by 5 study
team members, 4 Iraqi counterparts who had attended the 1st and 2nd sessions as alternative to
the field survey and one each from the Ministry of Finance and the Ministry of Planning and
Development Cooperation. Five members of the local partner also participated as observers.
The study team gave a presentation based on the study result and participants discussed the
chemical fertilizer sector in Iraq based on current and predicted future world market of the
sector. The process to examine the project currently under planning as a candidate of an ODA
loan project was also confirmed.
1-6
Chapter 2
General Information of Iraq and the Project Site

2.1 General Information of Iraq
Basic data of Iraq
(1) Capital City : Baghdad (Population; about 5-6 million)
(2) Area : 438,317 km2 (About 1.2 times larger than Japan)
(3) Population : 27,100 thousand people (Based on World Bank estimation in

2004)
(4) Languages : Arabic, Kurdish (Both are official languages)
(5) Races : Arabic (Shiite is about 60% of the total population. Sunnis,
about 20%. Kurdish, about 20%), Minors (Turkmen, Assyria)
(6) Religions : Islam (Shiite, Sunnis), Christianity, Others
(7) Political System : Republican Government
(8) President : Jalal Talabani (Elected on April 6, 2005)
(9) Government : The Second General Election of the National Diet was carried
out on Dec 15, 2005 and the new government started on May 20,
2006 including 40 ministers headed by the new prime minister
Nouri al-Maliki. On March 7, 2010, The Third General
Election of the National Diet was carried out and at present, the
final result has been counted.
(10) GDP : 70,100 million U.S.Dollars (Based on IMF estimation in 2009)
(11) GDP per-capita : 2,245 U.S. Dollars (Based on IMF estimation in 2009)
(12) Proved oil reserves : 115 billion barrels (Based on BP statistics in 2006. The third
largest in the world)
2.2 Al-Anbar Governorate
2.2.1 General Information
The outline of the Al Anbar Governorate is summarized as follows Stud Team our reference
and proper understanding:
2-1
y Capital : Ar Ramadi
y Other major cities : Fallujah and Haditha
y Land Area : Total 137,808 km2
y Population : Approximately 1,230,000 in 2003
y Al Anbar is the geographically largest governorate among 18 governorates in Iraq, and

encompasses the most of the country’s western territory with sharing borders with
Syria, Jordan and Saudi Arabia.
y Governorate name was changed like the following:
~ 1962 Dulaim
1962 ~ 1976 Ramadi
1976 ~ Al Anbar
2.2.2 Geography
Anbar Governorate spans the Syrian Desert and the most of land is a combination of steppe
and true desert characterized by desert climate, such as:
- Loss rainfall
- High variation heat between day and night
- Summer season rises to 42 °C and winter come down to 9 °C in ambient temperature.
- Wind direction : North-west is summer and sometimes South-west with the

maximum wind velocity of 21 m/sec.
- Average rainfall : 115 mm in winter
- Agricultural Products : Wheat, Potatoes, Barely, Maize and Vegetables Plus Fodder and
Palm trees of around 2.5 million trees
- River “Euphrates” cross diagonally in Anbar province from the north to the southeast,
passing through six of the sever districts.
Al-Qaim district
Anbar district
Haditha district
Hit district
Ramadi district
Fallujah district
2-2
The Ar Rutbah district is the longest district, occupying the majority of the Governorate
and includes the large desert area in the southwest.
(South: Wikipedia)
2.2.3 MIM Sector in Iraq
(1) General Statement of Iraqi Industry
The Iraqi Industry had shown a great surge and developments after the nationalization of the
Oil Production in the Country.
Some of the major industries that were established are:
- Fertilizer Industry
- Steel Industry
- Petrochemical Industry
- Engineering Industries
- Food Processing Industries
And many other small & medium Supporting Industries
One of the major industries, as indicated above was the Fertilizer Industry which depends on
natural gas availability in many regions (South & North) of Iraq. Also a major development
took place in West Iraq which is the Phosphate Fertilizer Complex in Al- Qaim. The
Phosphate mine is in Akashat which is about 120km from Al-Qaim Town.
The Anbar province did not have a good share of the Iraqi Industry although there is a big
glass factory in Ramadi City and a two million ton Cement Plant built by Kawasaki Heavy
2-3
Industries, Ltd., Japan.
In the 1980s, the industry did flourish although Iraq had a great conflict with Iran as
everybody knows which is called the Iraqi Iran War which lasted 8 years. Such war affected
the economy a great deal and Iraq had to finance many projects during that period. Such
financial problems had its shadow on the growth of the industry but industrial progress was
maintained steadily until the First Gulf War. The industry in total suffered heavily during the
1990s and up to the Second Gulf War.
Iraq has always maintained good human resources capabilities since thousand of Engineers
and technicians have studied and trained in many developing countries.
The future of the Iraqi Industry in all sectors seems to be promising.
(2) Main Industries in Anbar Governorate
There are three main industries in Anbar Province:
- Cement Industry
- Phosphate Fertilizer Industry
- Glass & Ceramic Industries
＊ Cement Industries:
There are two plants for the production of ordinary Portland Cement & Sulfate resistant
Cement. Al-Qaim plant was built by installing of machines exported from Romania in
1981 with a capacity of one million ton per annum. Since it was based on Romanian
Know-How, the plant faced many technical problems. Ministry of Industry is leasing
it for private investors.
The Kubaisa Cement Plant which was built in 1981 also with a capacity of two million
tons per annum by Kawasaki proved to be one of the best plants in Iraq. It is still in
production but it lacks the good management, the technical support & also the spare
parts.
＊ Phosphate Fertilizer Complex:
This complex with the phosphate mine in Akashat was built in 1976 and completed in
1983 by a Belgium Consortium. It started production in 1983. It consists of seven
plants among them are:
1- Akashat Mine
2-4
2- Beneficiation Plant Benefaction

3- Sulfuric Acid Plant
4- Phosphoric Acid Plant
5- Triple Super Phosphate Plant
6- Mono fertilizer Plant
7- Compound Fertilizer Plant (NP or NPK)
The design capacity of the complex is 600,000 tons/Annum but they really never
attained more than 68 % production. It has a total employment of 3942 but only 373
in administration. In 2007, utilization factor was only 32% of the total capacity. The
complex lacked good management, technical back up & rehabilitation.
＊ Glass & Ceramic Factory:
Established in 1970 and started production at early stage. It was actually built by FSU
technology through political & industrial agreement between Iraq & FSU. Later on
many production lines were changed to Japanese or Western Equipment and
Know-How.
It consists of two main plants with seven production lines. The production items are:
1- All kinds of Bottles
2- Production of Sheet Glass
3- Ceramics Tiles for Walls & Floors
4- Sanitary Ware
5- Sodium Silicate (Solid & Liquid)
6- Glass table ware.
The Factory employees are about 3,200 among them 225 for administration.
Capacity Utilization was checked last in 2002 and it was only 29%. The factory uses
very little raw materials imported from outside Iraq and the factory mainly depends on
the extracted deposits in Anbar Province.
2-5
Chapter 3
Overview of Industry and Minerals Sector in Iraq

3.1 Overview of Industry and Minerals Sector
The sector the Ministry of Industry and Minerals has jurisdiction over consists of the
following 6 industry sub-sectors.
1) Construction Industries
2) Engineering Industries
3) Textile Industries
4) Food and Pharmaceuticals Industries
5) Petro-Chemical Industries
6) Industrial Services
A chief is appointed for each industry sub-sector who supervises the state-owned companies
that belong to the sub-sector. The overview of each industry sub-sector is as follows. (The
statistical values come from the materials obtained from Stud Team Iraqi Counterpart after the
2nd meeting in Amman in January, 2010 and are as of the year 2009.
1) Construction Industries
This industry sub-sector focuses on manufacturing of materials such as cement, glass and
plastic as well as furniture. 8 state-owned companies belong to this industry sub-sector.
There are approximately 33,000 employees in total. With total sales of approximately 350
billion Iraq dinars (approximately 30 billion yen), this is the biggest sub-sector in the Industry
and Minerals sector in terms of sales amount.
2) Engineering Industries
This industry sub-sector deals with electricity, plant equipments, steel products, industrial
machinery and various engineering services. With 21 state-owned companies, this is the
biggest industry sub-sector in the Industry and Minerals sector in terms of the number of
companies and employees. The total number of employees is approximately 54,000 and the
total sales are approximately 140 billion Iraq dinars (approximately 11 billion yen).
3) Textile Industries
This sub-sector deals with manufacturing and distribution of textile materials, clothing items,
carpets and house furniture. 8 state-owned companies belong to this sub-sector and the total
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number of employee is approximately 34,000. The total sales of the sub-sector are
approximately 50 billion Iraq dinars (approximately 4 billion yen). The number of employees
is large, so this sub-sector has the potential to create more employment.
4) Food and Pharmaceuticals Industries
This sub-sector deals with production of dairy products, sugar, food oil, non-food oil,
tobaccos and medical products. There are 6 state-owned companies and approximately 22,000
employees in the sub-sector. The total sales are approximately 50 billion Iraq dinars
(approximately 4 billion yen). Dealing with products familiar with the public, this sub-sector
receives a large portion of the aid from the United Nations Industrial Development Organization
(UNIDO), which will be mentioned in Chapter 3.
5) Petro-Chemical Industries
This sub-sector manufactures and distributes chemicals, tires, batteries and paper from
abundant natural resources of Iraq. The chemical fertilizer industry, the target industry of this
survey, belongs to this industry sub-sector. The number of state-owned companies in this
sub-sector is 15, the second largest after the engineering industries. With approximately
30,000 employees in total, the sub-sector has sales of approximately 175 billion Iraq dinars
(approximately 14 billion yen). This sub-sector is the second most important to the
development of the Iraqi economy after the Oil and Gas sector and has a great potential for
growth.
6) Industrial Services
This sub-sector conducts information system management, designing and various surveys on
contract. It is a relatively small industry sub-sector with 10 state-owned companies and
approximately 3,700 employees.
3.2 History and Organization of the Ministry of Industry and Minerals
3.2.1 History of the Ministry of Industry and Minerals
The official website of the Ministry of Industry and Minerals refers to its history since the
establishment. It is useful to know the history of the ministry so that we can understand what
place and role the mining and manufacturing sector has been occupying and playing in the
country.
(1959) The Ministry of Industry was established to replace the Ministry of Construction.
Officials mainly from the former Ministry of Construction and also from other
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ministries assumed responsibility for the industrialization of both public and

private sectors in Iraq at that time.
(1970) The law of Ministry of Industry’s state-owned companies came into effect, which
expanded the scope of the ministry’s jurisdiction. Many state-owned companies
were founded around the same time.
(1974) The name of the ministry was changed from the Ministry of Industry to the
Ministry of Industry and Minerals.
(1982) The Ministry of Light Industries was founded as a separate ministry. An

administrative structure for the both ministries was established.
(1987) All the state owned companies that belonged to the Ministry of Industry and
Minerals and the Ministry of Light Industries were canceled and their authorities
and obligations were transferred to the succeeding institutes. The Ministers and
the Director Generals of the two ministries were given extensive authority at that
time.
In the same year, the names of the Ministry of Light Industries and the Ministry
of Industry and Minerals were changed to the Ministry of Industry and the
Ministry of Heavy Industries, respectively.
(1988) The Ministry of Industry and the Ministry of Heavy Industries were joined
together under the name of the Ministry of Industry and Minerals. Around the
same time, the state companies under the umbrella of the former Ministry of
Light Industries announced the sale of a number of factories to the private sector.
82 factories were sold to the private sector in a little over two years.
In the same year, the Military Industries Commission joined the Ministry of
Industry and Minerals, and the ministry name became the Ministry of Industry
and Military Industries.
(1991) The ministry name became the Ministry of Industry and Minerals once again.
(1991) All state-owned companies that dealt with the production and distribution of
electric power were transferred from the Ministry of Industry and Minerals to the
Commission of Electricity when it was established.
Although the above-described history of the ministry shows that there were some twists and
turns before the ministry became what it is now, it also shows that the ministry has been having
contact with the private sector and always playing an important role in the industrial
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development in Iraq.
3.2.2 Organization of the Ministry of Industry and Minerals
The current organization of the Ministry of Industry and Minerals is shown in Figure 2.2-1.
Three deputy ministers, appointed under the minister, are in charge of central government
activities, oversight of state companies under its jurisdiction, and the development of the sector,
respectively.
3.2.3 Outline of State Owned Companies in Industry and Minerals Sector
As described in 3.2.1, this sector has a very broad base with 68 state companies and
approximately 180,000 employees. The list of state companies of each industry sub-sector is
attached to the end of this chapter. The figures in the above explanation and the list at the end
of this chapter are as of the year 2009 and do not include the state companies in the military
industry that were recently transferred to the Ministry of Industry and Minerals. The figures
are used without any modification although some are slightly different from the statistical
figures from other data sources.
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3-5
Figure 3.2-1: Organization of the Ministry of Industry and Minerals of Iraq
(Source: Created by the study team based on Materials obtained from Iraqi counterpart)
Table 3.2-2: State Owned Companies Controlled by the Ministry of Industry and Minerals (Construction Industries)
Year of Address of Head Turnover Number of
Company Name Type of Operation
Establishment Office (Million Dinar) Employees
Survey of geology, water, etc. and survey
1-1 State Company for Geological Survey & Minin 1969 Baghdad 4,737 1442
and exploration of mineral resources in Iraq
Production and distribution of construction
1-2 State Company for Construction Industries 1987 Baghdad 2,755 7741
materials
Production and distribution of glass and
1-3 State Company for Glass & Ceramic Industry 1970 Ramadi/Anbar 547 2905
ceramic products
Production and distribution of cement
1-4 Iraqi State Company for Cement 1936 Baghdad 69,323 4820
products
1-5 State Company for Northern Cement 1953 Mosul/Ninavah 96,798 5779
products
Production and distribution of fireproof
1-6 State Company for Refractoriness Industry 1994 Baghdad 2,003 806
bricks and other products
1-7 State Company for Southern Cement 1995 Kufa/Najaf 174,572 8731
products
Production of trickle irrigation systems and
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1-8 Al-Nouman State Company 1985 Baghdad 249 844

related products
Table 3.2-3: State Owned Companies Controlled by the Ministry of Industry and Minerals (Textile Industries)
3-1 Baghdada Factory for Furniture Production of furniture 1995 Baghdad 499 181
3-2 State Company for Cotton Industries Production of cotton products 1945 Baghdad 4,979 3899
3-3 State Company for Handmade Carpets Production of handmade carpets 1993 Baghdad 1,067 886
3-4 State Company for Leather Industries Production of leather products 1931 Baghdad 7,450 4460
3-5 State Company for Ready Made Wear Industries Production of clothes and clothing materials 1988 Mosul/Ninavah 2,067 5268
Production of cotton materials, viscose rayon
3-6 State Company for Textile Industries (Hilla) 1967 Hilla/Najaf 19,682 9015
and other materials
Production of cotton materials, synthetic fabric
3-7 Wasit State Company for Textile Industries 1969 Kut/Wasit 4,049 5047
and other materials
3-8 State Company for Woolen Industries Production of wool materials and products 1926 Baghdad 9,377 5206
Table 3.2-4: State Owned Companies Controlled by the Ministry of Industry and Minerals (Engineering Industries)
2-1 Al-Faris State Company Production of various plant equipments 1988 Baghdad 6,937 1480
Production of spare parts for companies mainly
2-2 Al-Ikhaa State Company in the cement industry that are related to the 1984 Falluja/Anbar 5,857 3815
Ministry of Industry and Minerals
Production of electronic parts, solar cells,
2-3 Al-Mansour State Company 1975 Baghdad 521 812
industrial gas, etc.
Production of electrodes, forging steels, steel
2-4 Al-Sumood State Company for Steel Industries 1989 Baghdad 6,972 1879
frames, etc.
2-5 Al-Shaheed State Company Metallurgy 1980 (Unknown) 1,284 1519
2-6 Al-Tahaddi State Company Electric equipment work 1993 Baghdad 14,338 644
2-7 Al-Zawraa State Company Production of electric equipments 1988 Baghdad － 922
2-8 Diala State Company for Electrical Industries Production of electric equipments 1978 Baqubah/Diala 23,118 3349
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2-9 State Company for Electrical Industries Production of machinery and electric equipments 1965 Baghdad 5,477 5573
Ibn Majed State Co. for Heavy Engineering & Production and installation of heat exchangers,
2-10 2001 Zubair/Basrah 6,903 1570
Marine Industries storage tanks, steel frames, etc.
Production of steel products including steel
2-11 State Company for Iron & Steel (Unknown) Basrah 5,335 6303
pipes
2-12 State Company for Mechanical Industries Production of agricultural machinery 1968 Iskandariyah/Babil 5,477 5573
Production and installation of various plant
2-13 State Company for Heavy Engineering Equipment 1963 Baghdad 8,754 2725
equipments
2-14 Nassr State Company for Mechanical Industries Production of steel frames and other materials 1981 Baghdad 9,850 4179
2-15 Specialized Institute for Engineering Industries Engineering consulting, etc. 1972 Baghdad － 537
2-16 Ur State Company for Engineering Industries Production of electric cables, aluminum foil, etc. 1988 Nassiriyah/ThiQar 12,450 4993
Assembly of transportation equipments including
2-17 State Company for Vehicles Industries 1976 Baghdad 18,776 3669
trucks
2-18 Al-Fedha State Company (Unknown) (Unknown) 5,168 1242
2-19 Al-Ezz State Company (Unknown) (Unknown) － 1122
2-20 Salah Al-Deen State Company (Unknown) (Unknown) － 2170
2-21 Ibn Al-Waleed State Company (Unknown) (Unknown) － 1542
Table 3.2-5: State Owned Companies Controlled by the Ministry of Industry and Minerals (Food and Pharmaceuticals Industries)
4-1 State Company for Dairy Products Production of dairy products 1956 Baghdad 401 6781
Production of medical products and
4-2 S.C. for Drugs & Medical Supply Industry (Ninawa) 2002 Telkeef/Ninawa 17,012 2157
appliances
S.C. for Drugs & Medical Supply Industry Production of medical and cosmetic
4-3 1962 Sammara 23,741 4171
(Sammara) products
4-4 State Company for Sugar Industry Production of white sugar ,etc. 1957 Mosul/Ninavah 2,290 2092
4-5 State Company for Tobaccos & Cigarettes Production of tobacco and matches 1963 Baghdad 72 2488
4-6 State Co. for Vegetable Oils Industry Production of food oil, soap, detergent, etc. 1970 Sammara 6,741 5039
Table 3.2-6: State Owned Companies Controlled by the Ministry of Industry and Minerals (Industrial Services)
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6-1 Al-Kindy State Company 　(Unknown) 　(Unknown) － 776

Information and telecommunications system
6-2 General Systems Company 　(Unknown) － 882
and IT service
6-3 State Co. for Industrial Designs and Construction F/S and engineering 　(Unknown) － 522
State Co. for Industrial Designs and Consultation
6-4 Engineering 　(Unknown) － 856
(SIDCCO)
Information and telecommunications system
6-5 State Company for Information Systems 　(Unknown) － 173
and IT service
6-6 Development & Arrangement Industrial 　(Unknown) －－
6-7 Training & Apprenticeship Training of government agencies 　(Unknown) － 244
6-8 Training & Rehabilitation 　(Unknown) 　(Unknown) － 29
6-9 Industrial Development 　(Unknown) 　(Unknown) － 251
6-10 Al-Karama State Company 　(Unknown) 　(Unknown) －－

Table 3.2-7: State Owned Companies Controlled by the Ministry of Industry and Minerals (Petro-Chemical Industries)
Production of vitriolic acid, caustic soda
5-1 Al-Furat State Co. for Chemical Industries 1968 Hindiyah/Babil 9,567 2206
and other chemical products
5-2 Al-Sawary State Co. for Chemical Industries Production of plastic, asbestos, ink, etc. 1994 Al-Taji 675 1077
Production of lead accumulators, dry
5-3 State Company for Batteries Industries 1975 Baghdad 218 2296
batteries, etc.
Research and development of fine
5-4 Ibn Sina State Company 1992 Baghdad 665 707
chemicals
5-5 Mishraq Sulphur State Company Production of sulfur compounds 1969 Mosul/Ninavah 34,756 1685
5-6 State Company for Northern Fertilizer Production of ammonia and urea 1987 Beiji/Salah Al-Deen － 1513
5-7 State Company for Paper Industries Production of paper products 1970 Basrah 367 4694
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5-8 State Company for Petrochemical Industries Production of olefin, caustic soda, etc. 1977 Zubair/Basrah 9,329 1303
5-9 State Company for Phosphate Production of phosphoric fertilizers 1976 Al-Qaim/Anbar 29,961 3885
5-10 State Company for Rubber Industries Production of tire products 1989 Dewanyia 6 1840
5-11 State Company for Southern Fertilizer Production of ammonia and urea 1975 Zubair/Basrah 88,581 3347
5-12 State Company for Tires Industries Production of tire products 1989 Haidariyah/Najaf 777 3172
5-13 Tariq State Company (Unknown) (Unknown) － 851
5-14 Al-Hadher State Company Electrical instrumentation (Unknown) － 545
5-15 Mining and Isolation State Company (Unknown) (Unknown) － 593
(Source for Tables3.2-2 to 3.2-7: Materials obtained from Iraqi counterpart)

Chapter 4
Current Status of and Development Strategies for
the Industry and Minerals Sector in Iraq

Chapter 4 Current Status of and Development Strategies for the Industry and Minerals Sector in Iraq
Chapter 4 Current Status of and Development Strategies for

the Industry and Minerals Sector in Iraq
4.1 Current Status and Issues of the Industry and Minerals Sector in Iraq
4.1.1 Current Status
The Industry and Minerals sector in Iraq is extremely stagnant today as a result of the
protracted war and associated economic sanctions. According to a document released by the
Ministry of Planning and Development Cooperation of Iraq in August 2009, the sectors under
the jurisdiction of the Ministry of Industry and Minerals accounted for 13.9% of the country’s
gross domestic product (GDP) in 1988 but the ratio sharply declined to 3.8% in 1990 and 1.5%
in 2001. Even in 2007, which saw steady progress in post-war reconstruction efforts, it
remained at a level of 1.9%.
Main causes of this economic turmoil include the security problem, delay in developing
laws, shortage in power and raw material gas supplies, damaged and superannuated production
facilities, and diminished production capacity due to insufficient fund to repair those facilities.
Additionally, the inflow of inexpensive imports has been undermining the competitiveness of
Iraqi products. On the other hand, the labour force in the country is on the rise as the Iraqi
population has been growing and many who fled abroad during the tyrannical era are returning
home. The Industry and Minerals sector is not an exception. The increased number of
workers accelerates the exacerbation of labour productivity in the sector.
Table 4.1-1 shows the number of employees and labour cost in each sub-sector of the
Industry and Minerals sector in 2008, excluding the four military related companies that newly
joined that year. According to this data, the total number of employees sector-wide was above
180,000 and the monthly wage per capita was approximately 540,000 Iraqi dinars, or 43,000
Japanese yen, in 2008. Considering that the total number of employees in the oil and gas
sector is roughly 100,000, the Industry and Minerals sector evidently plays an important role as
an employer in the country.
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Table 4.1-1: Number of Employees and Per-capita Monthly Wage

in the Industry and Minerals Sector by Sub-sector
Per-capita monthly
Annual gross wage
Sub-sector No. of employees wage
(million Dinar)
(thousand Dinar)
Construction 31,481 254,180 672
Engineering 52,411 314,888 501
(56,217)
Textile 34,935 168,311 401
Food and pharmaceutical 23,717 140,660 494
Petrochemistry 33,009 259,289 655
Industrial services 3,054 22,676 619
(6,243)
Total 185,602 1,160,004 541
(The figures in parenthesis indicate the total number of employees when combined with
the armament industry that was included in the umbrella of the Ministry of Industry and
Minerals in 2008.)
(Source: “Industrial Sector Paper” published by the Ministry of Planning and
Development Cooperation in August 2009)
Table 4.1-2 shows the sales, expenses, and loss-and-profit balance as to each sub-sector
from 2006 to 2008. The table suggests that all the sub-sectors, except for the engineering
sub-sector, recorded a loss, especially for year 2008. A closer examination on the gross sales
figures reveals that the expenses increases outpaced the stagnant sales growth in these deficit
sub-sectors. Possible factors behind this trend include the rising number of employees, as
described earlier, and cost increases in conjunction with companies’ efforts to rehabilitate their
own plants.
Table 4.1-2: Gross Sales, Expenses, and Loss-Profit Balance
in the Mining and Manufacturing Sector by Sub-sector
(2006 to 2008)
(million dinars)
2006 2007 2008
Sub-sector
Loss-Profit Loss-Profit Loss-Profit
Gross sales Expenses Gross sales Expenses Gross sales Expenses
Balanace Balanace Balanace
Construction 412,155 297,970 114,185 411,135 338,331 72,804 459,718 493,463 -33,745
Engineering 210,881 210,808 73 226,264 221,566 4,698 248,232 440,498 -192,266
Textile 91,071 112,149 -21,078 115,710 124,574 -8,864 115,696 239,549 -123,853
Food and pharmaceuticals 120,523 112,556 7,967 104,996 106,424 -1,428 79,606 184,656 -105,050
Petrochemistry 189,642 188,318 1,324 175,393 193,454 -18,061 403,140 378,927 24,213
Industrial services 54,316 48,273 6,043 65,516 62,878 2,638 78,824 81,104 -2,280
Total 1,078,588 970,074 108,514 1,099,014 1,047,227 51,787 1,385,216 1,818,197 -432,981
(Source: “Industrial Sector Paper” published by the Ministry of

Planning and Development Cooperation in August 2009)
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4.1.2 Issues
The above-mentioned Industrial Sector Paper released by the Ministry of Planning and
Development Cooperation in August 2009 points out the following as the issues faced by the
Industry and Minerals sector in Iraq.
・ Developing a legal framework to reinforce the authority of the Ministry of Industry and
Minerals.
・ Developing a legal framework, strengthening the tarrif system, and standardizing

quality control to address the degrading competitiveness of domestic products caused
by inexpensive, low-quality imports
・ Promoting domestic industries by requiring all the ministries and agencies to use
made-in-Iraq products in place of imported goods.
・ Banking system reform to support operating capital of corporations.
・ Legislation to address the increasing number of employees resulting from the return of
citizens to workforce since 2003.
・ Rehabilitating the current obsolete production equipment and implementing

most-advanced technologies.
・ Addressing the unstable power supply and its adverse impact on production capacity.
・ Addressing the shortfall in gas to be suppied to plants that use gas as a raw material.
・ Addressing the swelling production costs caused by the high standards of petroleum
product prices and electricity bills.
During the first meeting in Amman, the Iraqi counterpart listed up specific examples of
factories and plants needing immediate restoration of production capacity that are owned by
state-owned companies in the Industry and Minerals sector as follows:
<Factories and plants that need immediate restoration of production capacity>

(1) Basrah Governorate (Kohr Al-Zubair) - steelmaking plant
(State Company for Iron & Steel)
(2) Anbar Governorate (Ramadi) – glass and ceramic factory

(State Company for Glass & Ceramic Industry)
(3) Maysan Governorate/Ninavah governorate (Mousl) – sugar factory

(State Company for Sugar Industry)
(4) Baghdad, etc. – tobacco factory

(State Company for Tobaccos & Cigarettes)
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(5) Ninavah Governorate (Mishraq) - sulfur compound plant

(Mishraq Sulphur State Company)
(6) Anbar Governorate (Al-Qaim) - phosphate fertilizer plant

(7) Qadisiya Governorate (Diwanyia) – rubber and tyre product factory

(State Company for Rubber Industries)
(8) Najaf Governorate (Haidariyah) – tyre product factory

(State Company for Tyres Industries)
(9) Basrah Governorate/Maysan Governorate – paper product factory

(State Company for Paper Industries)
(10) Babil Governorate – dry cell factory

(State Company for Batteries Industries)
(11) Textile factory
(12) Cooking oil factory
4.2 National Development Strategy and Positioning of the Industry and Minerals Sector
4.2.1 Overview of the National Development Strategy of Iraq
In March 2007, the Government of Iraq hammered out a National Development Strategy
(NDS) for 2007-2010. The NDS sets forth the government’s policies for reconstructing the
economy, which had lost vitality due to the maladministration by the longstanding dictatorship,
and replaces the National Development Strategy (2005-2007) launched in June 2005.
In the Strategy, the democratically-elected government of Iraq puts up a reconstruction

vision “Transform Iraq into a peaceful, unified democracy and a prosperous, market-oriented
economic powerhouse that is fully integrated into the global economy.” It also states that this
goal can only be achieved by a market-oriented economy driven by the ingenuity and creativity
of private enterprises, founded on the rule of law and led by a democratic and transparent
government.
The NDS represents a comprehensive framework for the Iraqi population to understand the
Iraqi government’s reconstruction and development plans. It specifies policies according to
the following four pillars in order to accomplish the vision held up by the government, i.e., to
establish concrete measures needed to make the vision a reality.
① Strengthening the foundations of economic growth
② Revitalizing the private sector
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③ Improving the quality of life
④ Strengthening good governance and security
The concrete policies for each pillar are summarized hereunder:

① Strengthening the foundations of economic growth
The policies for strengthening the foundations of economic growth emphasize the
importance of financial and monetary measures in realizing a stable macro-economic
environment. They include a commitment to fortify the oil and gas sector, which is
responsible for approximately 60 percent of the GDP and about 95 percent of foreign
currency earnings, through legislation, partnerships with foreign companies, slashing
subsidies, and various other measures. In the meantime, the Strategy sheds light on the
necessity to alleviate the current excessive dependence on the oil and gas sector alone, and
points at the strengthening of the agricultural sector and the tourism sector as a means of
industrial diversification.
② Revitalizing the private sector
The document discusses the important of revitalizing the private sector as the engine of
the nation’s economic growth and employment facilitation. It sets out objectives for
achieving this goal as improving the financial system, solidifying the electricity, transport,
communications, and other basic infrastructure, and privatizing more than 200 state-owned
enterprises (SOEs) in a phased manner.
③ Improving the quality of life
The NDS cites “improving the quality of life” of the nationals, or providing better water
supply and sewerage systems, sanitary and medical services, and housing environment, as
one of the basic rights of all Iraqis. As a matter of fact, a large portion of government
revenue and assistance provided by international aid agencies is spent to this end.
④ Strengthening good governance and security
The policies for this aspect emphasize the significance of enhancing good governance,
eradicating political corruption, and stabilizing security, in order to realize a democratic
state.
4.2.2 Positioning of the Oil and Gas Industry
As described above, a strengthened foundation for Iraq’s economic growth indisputably

requires a priority reconstruction and development of the oil and gas industry, which is of
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primary importance to the national economy. It is predictable that the government’s revenues
from the reconstruction and development of the sector will be allocated first to “Improving the
quality of life” fields, out of the four pillars of the national development. Table 4.2-1 below
details the amounts of investment needed between 2007 and 2010, estimated as of 2007 when
the National Development Strategy was formulated.
Table 4.2-1: Estimated Amounts of Investment Needed in the Oil and Gas Sector
(calculated as of 2002)
Segment 2007 2008 2009 2010
Crude oil production 4.70 4.80 5.20 5.30
Gas field development 0.45 0.50 0.55 0.50
Gas processing 0.50 0.50 0.50 0.50
Oil refineries 1.25 1.35 1.40 1.50
Pipelines 0.70 0.70 0.80 0.80
Maintaining production in existing oil fields 0.50 0.50 0.50 0.50
Maintaining production at relevant installations 0.20 0.25 0.25 0.30
Exploration of new oil fields 0.10 0.10 0.10 0.10
Total 8.40 8.70 9.30 9.50
(Source: The National Development Strategy (2007-2010) published by the Iraqi Government)
4.2.3 Positioning of the Industry and Minerals Sector
The National Development Strategy also estimates needed investments for other sectors than
the oil and gas sector mentioned in Section 4.2.2 above. The investments needed (minimum
requirement for fulfilling the basic needs of the Iraqi people) for individual sectors were
estimated by the Iraqi Government as given in Table 4.2-2. Incidentally, these figures are a
compilation of the calculations carried out by the Ministry of Planning and the respective
ministries and agencies of Iraq in December 2002.
Table 4.2-2: Estimated Amount of Investment Needed by Sector
Four-year
Sector 2007 2008 2009 2010
total
Oil and gas 8.4 8.7 9.3 9.6 36.0
Electricity 6.0 4.4 3.5 2.6 16.5
Water resources 1.0 1.5 1.5 1.2 5.2
Agriculture 1.1 1.0 1.0 1.0 4.1
Industry
0.3 0.2 0.2 0.1 0.8
(and mining & manufacturing)
Transport 7.5 7.5 7.5 7.5 30.0
Construction 1.5 1.5 1.5 1.5 6.0
Housing 10.0 12.0 15.0 15.0 52.0
Insurance 2.5 3.3 4.4 4.5 14.7
Education 0.6 0.6 0.6 0.6 2.4
Communications 0.3 0.3 0.2 0.2 1.0
Public sanitation 1.4 1.9 2.0 2.7 8.0
Regional development 2.5 2.5 3.0 3.0 11.0
All sectors 43.1 45.4 49.7 49.5 187.7
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As shown in Table 4.2-2 above, when calculated based on the viewpoint of “fulfilling the
basic needs of the Iraqi people”, the necessary investment amounts for the mining and
manufacturing sector were estimated rather low in 2002. This was unavoidable because, as
previously mentioned, the government had a policy to give paramount priority to the
reconstruction and development of the oil and gas sector, which underpins the nation’s economy,
and the improvement of the quality of life of the people, in order to accomplish its
reconstruction vision. The lower priority given to the Industry and Minerals sector, however,
does not mean that the sector was considered as insignificant. On the contrary, the importance
of the sector is expected to heighten as the country’s economy gets on a reconstruction track.
The following provides the rationales for this interpretation as seen in the National
Development Strategy.
(1) Moving away from the excessive dependence on the oil and gas sector
The National Development Plan refers to the strengthening of the oil and gas sector as the
most effective way to reinforce the foundations for the Iraqi economy. At the same time, it
highlights the risks of the excessive dependence on this sector and the necessity for diversifying
domestic industries, from the standpoint of sustainable economic growth, building on the
following three reasons.
・ Avoiding monoculture economy excessively replyin on the natural resources.
・ Economic growth relying exclusively on oil is unstable due to the volatility of crude
oil prices.
・ Addressing the unemployment issue.
Iraq has undergone drastic declines in the government’s revenue due to crude oil price
doldrums and export moratoriums for various reasons. Therefore, the country recognizes the
necessity for reforming its industrial structure and diversifying sources of economic growth.
The Industry and Mineral sector may well play an essential role in diversifying Iraq’s
industries. As explained earlier, this sector covers a wide spectrum of sub-sectors and thus the
growth of the sector will directly lead to industrial diversity. Moreover, since many of the
industries in the sector are labour-intensive, it is highly potential for creating jobs. This also
endorses the importance of the sector.
(2) Decentralization
The National Development Strategy points out the importance of decentralization and the
reconstruction and development of regional economies. To move away from the centralized
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economic system, the plan notes as necessary actions the utilization of local governments,
equitable distribution of budgets, and allocation of funds provided by foreign aid organizations
and private enterprises to regions.
From the standpoint of revitalizing regional economies as well, the Industry and Minerals
sector is expected to assume a significant role. In this sector, the location of natural resources
is not the only factor for the industries to determine the place to construct plants, as in the oil
and gas sector; economic activities associated with this sector can take place in many parts of
the country.
(3) Revitalizing the private sector
Revitalizing the private sector is also an integral part of Iraq’s reconstruction and
development. In the light of this importance, the government of Iraq is working toward
creating a setting and framework which allow the private sector to make easy entry; more
specifically, the government is tackling to improve security, establish legal systems, and
improve the remittance scheme and other aspects of the financial sector.
As previously described, the Industry and Minerals sector has a lot of SOEs. Because they
are in moderate sizes and many of them are in relatively downstream industries, they can be
operated independently with ease. Thus, the barrier for private capital to enter is fairly low.
In fact, the Ministry of Industry and Minerals has launched a policy to maximally tap private
capital in reconstructing and developing the Industry and Minerals sector. Again, the sector
will play a vital role in this aspect as well.
With all the above considered, the Industry and Minerals sector should be sufficiently
recognized as indispensable for sustainable development of the Iraqi economy from the mid-
and long-term standpoint, though it is not regarded as one of the top priority sectors in the
National Development Strategy.
4.2.4 Positioning of the Chemical Fertilizer Industry
Table 4.2-3 shows an industry-by-industry breakdown of the estimated amounts of

investment needed in the mining and manufacturing sector (2007-2010) calculated as of 2002,
provided in Table 4.2-2.
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Table 4.2-3: Estimated Amounts of Investment Needed

in the Industry and Minerals Sector by Industry
(million U.S. dollars)

Industry 2007 2008 2009 2010
Mineral resources mining 1.8 1.2 1.2 0.6
Food, beverages, and tobacco 12.3 8.2 8.2 4.1
Spinning, clothing, and leather products 14.4 9.6 9.6 4.8
Papermaking and timber 0.9 0.6 0.6 0.3
Chemical industry 84.3 56.2 56.2 28.1
Pharmaceutical industry 11.4 7.6 7.6 3.8
Construction 67.5 45.0 45.0 22.5
Steel and non-ferrous industry 50.4 33.6 33.6 16.8
Machinery and electric engineering 55.2 36.8 36.8 18.4
Others 1.8 1.2 1.2 0.6
All industries 300.0 200.0 200.0 100.0
As shown above, a greater amount of investment was estimated for the chemical industry, to
which the chemical fertilizer industry is included in this study belongs, than the other industries.
This is probably because the chemical industry is positioned relatively upstream and closely
related to the oil and gas sector and it is a process industry that requires substantial costs for
reconstruction. Another reason can be the levels of its economic impact and contribution to
job creation that the industry’s reconstruction can bring.
The chemical fertilizer industry, in particular, has considerable link with the country’s
agricultural policies. The agriculture of Iraq today occupies a limited fraction of the national
economy. Nevertheless, the recent rapid increase in the population, limited arable lands, and
worsened productivity due to absence of irrigation installations have caused the nation to
procure its staple foods mainly through import.
That being the case, the National Development Strategy states that the reconstruction of
agriculture and fisheries is also a key to the reconstruction and development of the Iraqi
economy and needs focused efforts. The reconstruction of agriculture and fisheries will
expectedly lead to a higher self-sufficiency and a better climate for employment, just like the
Industry and Minerals sector. Fertilizers are indispensable for enhancing crop yields. Thus,
reconstructing and developing the chemical fertilizer industry should be given a relatively-high
priority among the industries in the mining and manufacturing sector.
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4.3 Reconstruction Policies for the Industry and Minerals Sector
4.3.1 Recent Reconstruction Policies and their Outcomes
In view of the current stagnation in the Industry and Minerals sector, the Ministry of
Industry and Minerals has hammered out various measures in recent years. In the “Guide
Book for State-owned Enterprises (in the Industry and Minerals Sector)” issued in 2006, the
Ministry affirms the necessity for serving as the driving force in revitalizing non-oil-and-gas
sectors and diversifying domestic industries by fostering advanced and value-added industries.
To do so, bringing down the capital participation in SOEs and reforming the intra-ministry
structure are fundamental, as noted in the publication.
At that time, the Ministry drew up short-, mid- and long-term plans, as explained below, and
aimed to realize them.
Short-term plan: Reconstruct and reform state-owned manufacturers with high growth
potential (slated for two years from 2004)
Mid-term plan: Prepare for devolving state-owned manufacturers to the private sector
(slated for five years from 2005)
Long-term plan: Develop an overarching policy framework for growth of the domestic
industry led by the private sector (slated for 2004 and succeeding years)
The Ministry quoted the following three pillars as the priorities in reconstructing the sector.
① Create an environment for the private sector to lead the regeneration of domestic
industries, by developing adequate legal and financial systems.
② Prepare for a market-oriented economic environment with a view to privatization of

SOEs.
③ Revitalize the cement, glass and other industries that new comers can enter with a small
amount of investment yet can expect domestic demand.
In addition to these pillars, the Ministry has been planning and implementing more concrete
measures through trial and error. For example, it once intended to develop large-scale
industrial zones on the then Ministry of Armaments and Industry’s proprietary land in Basrah
Province, Babil Province, and Nenavah Province.
As described above, the Government of Iraq and the Ministry of Industry and Minerals have
long been striving to cultivate the Industry and Minerals sector with explicit policies. Certain
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outcomes are visible in that some plans to rehabilitate SOEs have already reached the
implementation stage and that private capital participation in some SOEs has been determined.
Yet, it is fair to say that the reconstruction of the Industry and Minerals sector is at the very
beginning stage, based on the statistics shown in Section 4.1.1 and the issues discussed in
Section 4.1.2 above.
4.3.2 Directionality of Reconstruction Policies beyond 2010
The above-mentioned the Industrial Sector Paper published by the Iraqi Ministry of
Planning and Development Cooperation in August 2009 raises the following directions for its
reconstruction policies beyond 2010.
・ Reconstruct SOEs by laying new production lines and thereby improving productivity.
・ Reconstuct companies and plants in accordance with the market principles.
・ Expand the scope of roles to be assumed by the private sector in developing the national
economy and allow the private sector to lead the Industry and Minerals sector to a
high-value added industry.
・ Encourage the provision of soft loans for fostering medium- and small-scale industries,
developing industrial zones and cities, and projects under planning.
・ Introduce modern technologies into the Industry and Minerals sector through partnering
with global corporations that have cutting-edge technologies.
・ Improve and expand research facilities and institutes in collaboration with the Ministry of
Science and Technology.
・ Intensify geographical and mineral resources surveys to identify available natural

resources.
・ Identify high-value added and competitive industries and attract investment from in and
out of the country.
・ Create “investment maps” based on available natural resources and competitive

advantages, in collaboration with local governments, thereby promoting the establishment
of new industries with the use of domestic and foreign investors’ funds.
・ Develop laws to materialize an investment climate appropriate for domestic and foreign
investors as well as laws on consumer protection and antimonopoly.
These reveal that there is no change in the Iraqi government’s basic policies of leveraging
private capital in developing domestic industries; the only exception is that private investment is
called for in high-value added industries that need more advanced technologies rather than
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existing industries in the country. In the meantime, the above policies suggest that they will
tap soft loans from international aid providers in those areas where it is difficult for private
investors to partake.
4.4 Background and Results of Privatization Policies for the Mining and Manufacturing
Sector
4.4.1 Privatization Policies of the Coalition Provisional Authority (CPA)
Iraq’s policies of privatizing SOEs started with policy measures pushed forward by the
Coalition Provisional Authority (CPA), which was formed following the declaration on the
extensive ending of the Iraqi war. In September 2003, the CPA announced a new Foreign
Investment Law as a stepping stone to promote the liberalization of the Iraqi economy. The
bill was to assure that any foreign private company investing in Iraq would receive the same
treatment as Iraqi private companies and to stimulate foreign investment to contribute to the
reconstruction of the economy.
The new Foreign Investment Law acknowledges a 100% ownership of an Iraqi SOE by
foreign capital in any field other than oil and mineral resources-related fields. It stipulates
reforms of tax and financial systems in order to promote investment by such foreign firms.
There has been, however, constant criticism against the policy to privatize SOEs by virtue of
this law, because some view that the law gives priority to interests of multi-national companies
over those of Iraqi players and thus does not necessarily contribute to a sound growth of the
Iraqi economy. It has also been said that an employment issue emerged as a result of the
large-scale payroll cutting in SOEs in the course of privatization.
4.4.2 Privatization Policies of the Ministry of Industry and Minerals and their Results
Although the CPA’s initiative with the new Foreign Investment Law was not well accepted
by the Iraq population, the concept of leveraging private investment in reconstructing the Iraqi
economy was inherited by the following Interim Government, Transitional Government, and
democratic government. There are growing expectations for private companies today,
particularly in the Industry and Minerals sector, whose reconstruction has been slow though it
plays a vital role in diversifying the economy and creating jobs and is highly anticipated to
support the national economy into the future.
In the “Guide Book for State-Owned Enterprises”, mentioned earlier, the Ministry of
Industry and Minerals categorized the 56 SOEs that were under its jurisdiction at the time of
issuance into four, from the standpoints of current profitability and future prospect, as part of the
SOE reform.
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SOEs affiliated with the Ministry of Industry and Minerals: 56 with 200 plants (as of 2006)
(A) Enterprises with high levels of domestic demand and promising markets (14)
(B) Enterprises with high growth potential and vast amounts of investment needed (8)
(State Company for Iron & Steel, Mishraq Sulphur State Company)
(C) Enterprises that will supposedly be able to cover the minimum labor cost with appropriate
amounts of investment (28)
(D) Enterprises to be liquidated (6)
The Iraqi counterpart did not provide explicit explanation on whether this categorization is
still valid or which SOEs fall under which category, during the field survey. The above
information at least proves that the Ministry had an intention to set priorities to SOEs as part of
their effort to reconstruct the sector at that time.
Also, the Investment Department of the Ministry compiled a document called “Industrial
Investment Opportunities in Iraq,” dated August 2007, which lists up 21 factories and plants that
have investment opportunity for private companies in and outside Iraq (Table 4.4-1).
Table 4.4-1: Factories and Plants Subject to Investment by Private Companies
1 Iron & Steel Company Plant 12 Pharmacitical Bottles Plant in Famadi

2 Petrochemical Complex 13 Medicine Drugs Plant in Nineveh
3 Automotive Complex 14 Fertilizer Plant in Khor Al-Zubair
Glass & Ceramic Industry
4 15 Electric Transformer Plant in Diala
(New Ceramic Floor Tile Factory)
Glass & Ceramic Industry
5 16 Aluminium Plant Nasiriya
(Old Ceramic Floor Tile Factory)
Glass & Ceramnic Industry
6 17 Cable Plant in Nasiriya
(Sanitary Ware Factory)
7 Missan Paper Plant 18 Irrigation system manufacturing Plant
8 Kubaisa Cement Plant 19 Mecanical Plant in Iskandiriya
9 White Cement Plant in Falluja 20 Phosphate Plant in Al-Qaim
10 Najaf Cement Plant 21 Urea Fertilizer Plant in Abu Al-Khasib
11 Sheet Glass Plant in Ramadi
(Source: MIM data)
The applicable law in “Industrial Investment Opportunities in Iraq” is the Investment law
enacted in 2006. The law defines benefits that domestic and foreign private companies can
enjoy by investing in Iraq; more details of the law will be discussed later in Section 4.5.1.
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“Industrial Investment Opportunities in Iraq” presents an investment concept to “rehabilitate

a factory in Iraq in accordance with the latest technology and modern management and
operation methods, all at the investor’s account against their share of accomplished production,
for a certain period.” The rehabilitation plan of a factory will be released to the investor in
form of an “Investment File”, which contains a plan formulated by the Ministry of Industry and
Minerals or the pertaining SOE. The investor in Iraq or abroad will carry out the plan
proposed in the File within the prescribed period of time, during which they concurrently
recover the investment cost and returns from the outputs from the factory.
It is noteworthy that the term “privatization“ is not used so much as it used to be, in recent
movements concerning the utilization of private investment in the mining and manufacturing
sector. The Iraqi counterpart also made a memorable statement, during the field survey, “The
term ‘privatization’ is no longer relevant to the Ministry of Industry and Minerals’ policies
today.” As already mentioned, the government’s policy to privatize SOEs caught much
criticism from inside the country. The reconstruction of the Industry and Minerals sector today
does not mean simply bringing in private capital into a SOE itself. It is more like a scheme in
which a private firm (or a joint venture between Iraq and a private firm) wins an order for a
rehabilitation project at a plant and recovers the fund invested and due profits from the products
generated at the plant, and they call it “investment.” This investment scheme seems to have
been elaborated in order to renovate the decrepit plants while keeping the status of SOEs as it is.
As described above, Iraq’s privatization policies on SOEs in the simple sense have changed
the direction due to the criticism from the nationals and delays in developing necessary laws.
In the meantime, expectations for the private sector at domestic and abroad are still evidently
high, and private capital will continue to be aggressively introduced in the framework of the
new “investment scheme”. On the other hand, the hurdle for the private sector to aggressively
participate in these rehabilitation projects is high because the projects are extremely risky and,
among other things, security in the country is yet to be improved. This is why the
rehabilitation projects are not in progress in line with the timelines initially plotted by the
Ministry.
4.5 Investment Law of Iraq and Examples of Introducing Private Capital
4.5.1 Investment Law of Iraq (Original copy translated from Arabic to English is
Attached to the Appendix)
In 2006, the Government of Iraq established and enacted the Investment Law (Law No. 13
of 2006) for the purposes of accelerating investment by foreign private companies and
protecting interests of domestic investors. The following outlines the purposes of the law.
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(Purposes of the Investment Law of Iraq)

・ Promote investment in and transfer up-to-date technology to Iraq aiming at
contribution to the country’s reconstruction.
・ Encourage investment from inside and outside the country by offering incentives and
protection to private investors.
・ Foster human resources and improve the employment climate in Iraq.
・ Expand exports by Iraq so as to improve the nation’s international balance of

payments and foreign trade position.
Investors need to be licensed by the National Investment Commission (NIC), which was
founded based on the Investment Law, in order to enjoy the investor’s rights authorized by the
law. The investment licensing is given to any project funded with an investment of 250,000
U.S. dollars or more in the areas other than the oil and gas, banking and insurance sectors. The
law stipulates the rights of licensed investors, whether Iraqi or non-Iraqi, as follows:
(Rights of investors)
・ Remit investment capital and profits after taxes and duties levied in Iraq in hard
currency to the investor’s home country.
・ Acquire or dispose of stocks and bonds listed on the Bagdad Stock Exchange.
・ Lease necessary land for the project for up to 50 years.
・ Purchase insurance for the project from any insurance company in and out of Iraq.
・ Open a bank account for local or foreign currency at a bank in or out of Iraq.
・ Secure a certain level of protection with respect to expropriation or nationalization of

the project in whole or in part.
・ Employ non-Iraqi personnel in case where there is no Iraqi skilled or qualified

adequately.
・ Provide residential and immigration visas to the non-Iraqi personnel.
・ Remit compensations for the non-Iraqi personnel after taxes and duties to an overseas
bank account.
・ Have immunity from corporate and other relevant taxes for ten years from the start of
commercial operation.
・ Have immunity from duties imposed on exported assets for three years from the start
of the project.
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In the meantime, investors will be legally bound to perform the following obligations.
(Obligations of investors)
・ Notify the NIC or the local investment commission immediately after the installation
of a fixed asset for the project or the start of business operation.
・ Maintain the appropriate accounting documents audited by a certified accountant in

Iraq.
・ Submit to the NIC a report on the feasibility study concerning the economic and
technical aspects of the project and information regarding budgeting and progress of
the project.
・ Record all imported products exempted from taxes based on the Investment Law and
their term of depreciation.
・ Abide by Iraqi legislations and international standard laws and regulations concerning
environmental protection, safety, sanitation, and other systems in association with
security and customs.
・ Abide by the Iraqi Labor Law and assure the minimum working conditions, such as
wages, leaves, and working hours.
・ Comply with the project implementation schedule submitted to the NIC (A delay of
more than six months may result in punitive measures, including forfeit of the
investment license.)
・ Provide adequate training to Iraqi workers as well as hiring Iraqis with priority.
4.5.2 Example of Introducing Private Capital in the Industry and Minerals Sector
As stated above, the Ministry of Industry and Minerals has been striving to execute
rehabilitation projects based on private capital by giving priority to highly-potential SOEs or
their factories and plants. Accordingly, the rehabilitation projects of some cement plants and
chemical fertilizer plants have been awarded to private companies (or joint ventures between
SOEs and private companies.)
On its Websites, the Ministry of Industry and Minerals presents its investment plan for year
2009 containing rehabilitation projects for 15 SOEs. It is unknown whether private companies
in or out of Iraq have shown interests in some of these projects. However, many of these
rehabilitation projects may fail to raise interests of domestic and foreign private companies in
participation, in consideration of the delay in improving security in the country, the technical
difficulties in implementing the rehabilitation projects at some factories and plants, and the long
term for recovering investment cost and profit.
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4.6 Assistance by International Aid Agencies (Donors)
The preceding sections have explained that, although the utilization of private capital inside
and outside Iraq has been seriously examined for rehabilitating factories and plants of SOEs in
the mining and manufacturing sector, these projects are not progressing at the pace initially
expected due to various factors. Under such circumstances, there is a growing expectation for
international aid agencies also in this sector, which was given lower priority in the past.
U.N. Security Council Resolution No. 1511 adopted in October 2003 articulates transfer of
sovereignty to Iraq and roles to be played by the United Nations. It also calls for assistance of
U.N. member states in reconstructing and developing the Iraqi economy. Following the
resolution, the international community expressed an intention to provide the country with an
assistance of at least 32 billion U.S. dollars in total, at the International Conference on the
Reconstruction of Iraq, held in Madrid, Spain, in the same year. At the conference, the
Government of Japan pledged an assistance of up to five billion U.S. dollars, comprising 1.5
billion dollars in grant aid and a maximum 3.5 billion dollars in soft loan, the second largest
amount after the United States, which pledged to donate approximately 20 billion dollars.
In the wake of these movements, governments and international institutions have been
providing assistance in the said international framework. Many of their efforts, however, have
focused on humanitarian assistance in form of food assistance, refugees relief, and medical,
educational, and other assistance; development of highly-urgent infrastructure, such as
electricity, transport, communications and irrigation; and reconstruction of the oil and gas
industry, which forms the backbone of the nation’s economy. Very little has been provided to
the mining and manufacturing sector, subject to this study.
According to what was told by the Iraqi counterpart during the field survey, the United
States (or the government agency) has provided the following assistance to the mining and
manufacturing sector in Iraq in recent years.
(2007)
・ A total of approximately 50 million U.S. dollars was provided to the sector in grant aid.
・ Of the above, about 5 million U.S. dollars was provided to Northern Fertilizer Company
(State Company for Fertilizer Industry in Beiji).
(2008)
・ A total of approximately 25-30 million U.S. dollars was provided to the sector in grant
aid.
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・ Of the above, about 2 million U.S. dollars was provided to Southern Fertilizer Company
(State Company for Southern Fertilizer Industry).
Moreover, again according to the information obtained from the Iraqi counterpart during the
field survey, the United Nations Industrial Development (UNIDO) has provided the following
grant-aid assistance.
・ Rehabilitation of a dairy product factory (of State Company for Dairy Products) in
Diwaniyah, Qadisiyah Province <4.1 million U.S. dollars>
・ Provision of experiment apparatuses to food production companies <1.6 million U.S.
dollars>
・ Human resources development <3.6 million U.S. dollars>
・ Rehabilitation of a dairy product factory in Mosul, Ninawa Province <to be
determined>
According to the above information obtained during the survey, the actual assistance
implemented in the sector, though there exists some, is by far less than that provided to the oil
and gas sector. It is limited to funds for procuring bare minimum spare parts and maintaining
facilities at factories and plants and those projects that are directly related to the livelihood of
citizens, such as food factories.
In light of this situation, the Government of Japan and JICA have decided to provide
approximately 18 billion yen in soft loan for the rehabilitation project at an existing fertilizer
factory in Khor Al-Zubair, Basrah Province. If this project is completed, it is one of the largest
assistance projects by an overseas donor in the Iraqi Industry and Minerals sector.
As described above, assistance by overseas donors in the Industry and Minerals sector has
been limited today. While the developments of basic social infrastructure and the oil and gas
sector have just been embarked at last, the reconstruction of the sector is an indispensable part
of the nation’s efforts to improve the employment environment, diversify its domestic industries,
and revitalize regional economies. Thus, while paying close attention to coherence to the
Government of Iraq’s private capital utilization policies, demand for assistance by overseas
donors in the sector seems to increase more than ever.
4.7 Mining and Manufacturing Sector in Mid-Western Iraq
4.7.1 Mining and Manufacturing Sector in Mid-Western Iraq
Mid-Western Iraq where Al-Anbar, Najaf, and Karbala Governorates are situated occupies
an area of about one-third of the whole land. This area and its surrounding area are mostly
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composed of steppe and desert soils. The Governorate has a desert climate with little
precipitation and a huge gap between day and night temperatures. The mercury rises to 42
degrees centigrade in summer and drops to as low as 9 degrees centigrade in winter. The area
is situated in a very harsh natural environment—strong northwest winds and occasional
southwest winds blow with the wind velocity sometimes reaching 21 meters per second.
As for the mining resources, Al-Anbar Governorate has very little production of such
resources as crude oil and natural gas that are abundantly yielded in the country. Recently,
however, natural gas reserves are confirmed in the Akaz region located near Al-Qaim in the
province. There is an idea of utilizing the gas for large-scale test production of ammonia and
urea in Al-Qaim.
At present, major minerals yielded in the Mid-Western Iraq, mainly in Al-Anbar

Governorate, are abundant phosphate rocks that mostly concentrate in Akashat and silica sand,
limestone, argil and clay that are produced in the desert area. In Al-Anbar Governorate, these
resources are utilized as raw materials as follows: the former for phosphate fertilizers and the
latter for cement, glass and ceramic industries.
The phosphate fertilizer and glass production in the Governorate are highly valuable because
they are the only production site in the country. However, the mining and manufacturing
sector in the Mid-western region accounts for a very small portion of all industries in Iraq.
It is not an overstatement to say that the Iraqi economy depends almost exclusively on
exportation of crude oil. It exports crude oil and oil refinery products and imports industrial
products. This is demonstrated by the following figures: oil-related exports accounted for
91.9% of all exports in value and industrial products accounted for 93.1% of all imports in value
in 2003.
The National Development Strategy (2007-2010) issued by the Government of Iraq in

March 2007 describes that the mining and manufacturing sector in Iraq accounts for less than 10
percent of the nation’s GDP. Nearly 100 percent of the business activities of the sector are
conducted by SOEs. The sector contributes greatly to employment in the country; of
approximately 200 SOEs with a total of approximately 500,000 employees across the country,
42 companies with approximately 130,000 employees are under the umbrella of the Ministry of
Industry and Minerals, according to a ministerial announcement in April 2008.
Nevertheless, in the Mid-western part of the country, there is no noticeable industry (As
mentioned earlier, phosphate fertilizer, cement, glass and ceramic are major industries there and
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there are only a few SOEs operating in the sector.). There is no question as to the importance
of future expansion and development of the mining and manufacturing sector in the region.
4.7.2 Glass Industry
The state-owned glass and ceramic company in An-Anbar Governorate totally dominates the
glass industry in Iraq. An overview of the company and its equipment and products are
described below.
Company name: State Company For Glass & Ceramic Industry (hereinafter referred to as
SCGC.)
Location: Al-Anbar, Ramadi Beside Warar Bridge
No. of employees: 2,387 as of 2006 (including 2,162 in the production segment and 225 in
the administration segment.)
History: Since founded as a sheet glass producer in 1970, SCGC has been
expanding its business to include floor tiles, sanitary ware and other
ceramics, glass bottles and tableware glass.
(1) Current operational status
1) Facility currently under operation: Equipment for floor tiles, sanitary ware
2) Facility slated to begin operation soon: Equipment for wall tiles, glass panes for
windows, and glass bottles for medicine
3) Facility whose operation is discontinued due to ageing:

Equipment for glass bottles, glass jars, tableware
glass, and sodium silicate
(2) Plant overview
1) Floor tile plant :
③ The current production capacity is 1,000,000 m2 per year, which can be increased
with a small modification.
④ Produces 30-centimer-square floor tiles in various shapes and colors.
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2) Sanitary ware plant:
③ The current production capacity is 5,000 tons per year, which can be increased with
a small modification.
④ Produces toilet bowls and cesspits in various shapes and colors
3) Wall tile plant:
① Currently being reconstructed under the leadership of a Lebanese company. The

2
start of operation is slated for 2007. The floor area is 35,000 m .
② The planned production capacity is 1,250,000 m2.
③ 100 percent of argil used as raw materials is domestically procured.
4) Sheet glass plant:
① Currently being reconstructed under the leadership of three Iraqi companies.

Machines and materials for the works are from Europe.
The floor area is 25,000 m2.
② The planned daily production of transparent and figured sheet glass is 120 tons.
③ Approximately 22 billion Iraqi Dinar (approximately 15 million dollars) is needed

for the construction.
5) Medical glass bottle plant:
① Currently under restoration work. Major equipment necessary for the works,
including heat-resistant fusing furnace and other equipment, are from Italy or India.
② Because profitability is expected high, the resumption of operation is hoped for.
③ The production capacity is 40,000 m2. Medical bottles are produced by modifying
regular glass bottles (and special equipment for the modification is needed.)
④ Major customers are pharmaceutical companies.
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6) Tableware glass plant:
① The production has been suspended since 2003 due to ageing of the equipment.
The facility needs to be replaced and repaired to restart operation. The company
hopes to restore the plant.
③ Products produced here include flat-bottom water cups, tea cups, plates, saucers, big
salad bowls and ash trays.
7) Glass bottle and jar plant:
The fusing furnaces of all lines need to be replaced and repaired to restart operation.
③ The products produced here include various wide- and small-mouth glass bottles.
8) Sodium silicate plant:
The fusing furnaces of lines need to be replaced and repaired to restart operation.
② There is one fusing furnace, which has a daily production capacity of 30 tons. The
2
floor area is 10,000 m .
③ Products produced here include solid and liquid sodium silicate.
(3) Advantages of SCCG
① Demand can be expected at home and overseas.
② Production cost is not high because approximately 80 percent of raw materials can be
obtained from Anbar Desert.
③ There is good water transportation as it is located near the Euphrates.
④ Located near Jordan, Saudi Arabia and Syria, it is close to markets.
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(4) SCGC’s project plans
SCGC intends to implement the following major facility investment projects:

Table 4.7-1: Glass Sector Project
Ratio of
Estimated Installation Estimated no.
Project name domestically-procured
investment capacity of employees
raw materials
Sheet glass 150 450 80 600
Lead crystal glass 15 6 65 100
Table 4.7-2: Ceramic Sector Project

Ratio of
Estimated Installation Estimated no. of
Project name domestically-procured
investment capacity employees
raw materials
Ceramic tableware 7 15 60 150
Red bricks 10 30 100 100
Ceramic insulator 10 2 60 80
Glaze for ceramics 7 18 60 100
Kaoline 7 40 100 100
4.7.3 Cement Industry
There are three cement companies in Iraq. There are also two other companies that deal
with such construction materials as refractory bricks and gravels that have similar properties to
cement. An overview of the three cement companies are introduced hereunder, especially that
of Iraqi State Company for Cement in An-Anbar Province in detail.
4.7.3.1 Overview of Three Cement Companies in Iraq
(1) Iraqi State Company for Cement
1) History, etc.:
① It was established in 1936 in Baghdad and production began with one kiln in 1949.
As of 1995, there were four plants.
② Employment: 2,867 (2,300 in the production segment and 567 in the
administration segment)
③ Products: regular cement, acid-proof cement, white cement
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2) Plant overview
Table 4.7-3: Facility of Iraqi State Company for Cement

Located in eastern end of
Kubaisa Regular cement 2,000,000 1,500,000
Al-Anbar
Kirkuk Regular cement 2,000,000 1,500,000
Located in western end of
Al-Qaim Acid-proof cement 500,000 500,000
Al-Anbar
Falluja White cement 290,000 218,000
Kubaisa paer sacks 30 million sacks not available
Kirkuk paer sacks 30 million sacks not available
Bagdad paer sacks 15 million sacks not available
The Kubaisa plant (west of provincial capital of Ramadi and Heet) was built in 1981 by
Kawasaki Heavy Industries. It has the annual production capacity of two million tons,
maintaining the biggest production in Iraq. Although it is still in operation, there are
management, technical and maintenance problems. Currently, about 0.3 million tons are
produced annually.
The Al-Qaim plant was built in 1981 with Rumanian know-how and machinery. The
plant has various technical problems and the Ministry of Industry and Minerals is leasing
the facility to a private investor. Currently, 2.200 tons are produced daily.
3) Current problems
The operation rate in 2002 was low at 48%, because of management, technical and
maintenance problems, aging of facility and a lack of major parts. There is awareness of
the need for overall rehabilitation. An estimated total amount of over one million dollars
is needed to recover to the original design capacity.
(2) Iraqi State Company for Northern Cement
1) History, etc.:
① It was established as Al Rafideen Cement Company in 1953 in Badoosh in

northern Iraq. It merged with Hammam Alalil Cement Company in 1964 to form
Mosul Cement Company, of which the current SOE become. Although it
expanded to operate 10 plants by 1984, only seven are under operation today.
② Products: regular cement, acid-proof cement, etc.
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2) Plant overview
Table 4.7-4: Facility of State Company for Northern Cement

Sinjar Regular cement 1,152,000 not available
total 3,579,000
(3) Iraq State Company for Southern Cement
1) History, etc.:
① It was established in 1995 in Al-Ashraaf in Najaf Province in southern Iraq. It

has eight plants. The major market is southern Iraq.
② Employment: 5,793 (4,528 in the production segment and 1,265 in the
administration segment)
③ Products: regular cement, acid-proof cement, etc.
2) Plant overview
Table 4.7-5: Facility of State Company for Southern Cement
Kufa (New) Regular cement 1,800,000 not available
Karbala Regular cement 2,000,000 not available
Muthana Regular cement 2,000,000 not available
South Cement Regular cement 450,000 not available
Om Qaser Regular cement 400,000 not available
Najaf Regular cement 208,000 not available
Al Sada Regular cement 200,000 not available
Al Semawa Regular cement 450,000 not available
Al Noora Regular cement 200,000 not available
Total 7,708,000
Details of current operation of the company are not known. According to the
corporation’s information, overall rehabilitation and staff training are needed to recover to
the original design capacity of the plants. This implies that the plants are not performing
4-25
as well as would be expected.

In the meantime, the need for new capital investment is also mentioned. This
indicates active demand in southern Iraq.
4.7.3.2 Overview of Refractory Bricks in Iraq
(1) Iraq State Company for Refractoriness Industry
1) History, etc.:
① It was established in 1994 in Falluja near Baghdad to produce refractory bricks

and other refractory products.
② Employment: 696 (596 in the production segment and 100 in the administration
segment)
③ Products: refractory bricks and other refractory products
2) Plant overview
Table 4.7-6: Facility of State Company for Refractoriness Industry
Falluja Refractory brick 1,500 not available
Other refractory
Karbala 6,000 not available
products
3) Current problems
There is a plan to enhance and restore some fusing furnaces, boilers and heat
exchangers. There is also a plan of producing quality refractory bricks in different shapes
with excellent heat resistance, insulation and acid resistance capacities. The possibility of
producing red refractory roof tiles and exporting some types of refractory materials are also
examined.
4.7.4 Chemical Fertilizer Industry
As described in Section 4.7.1 above, the only phosphate fertilizer production base in Iraq is
located the Mid-Western Iraq including three Governorates : namely State Company for
Phosphate (SCP) located in Al-Qaim, Al-Anbar Governorate. Phosphate rocks are excavated
in Akashat, approximately 170 km west-southwest of Al-Qaim, and transported to Al-Qaim
where they are processed into phosphate fertilizers.
SCP contributes greatly to the economy and society of the region as the only fertilizer
4-26
production site in the three provinces, and at the same time, it is extremely valuable since it is
the only phosphate fertilizer supplier in the country. Nevertheless, the company is currently in
great trouble due to the calamity of war inflicted over the years. One of the purposes of the
field survey is to investigate the possibility of restoring SCP.
Traditionally, the region has not produced crude oil or natural gas; therefore, production
bases of nitrogen chemical fertilizers, such as urea and ammonium sulfate, are concentrated in
the Southern and Northern regions where the resources are produced in large quantities.
Recently, however, natural gas reserves have been found in Akaz, near the city of Al-Qaim, and
there are some propositions about large-scale production of ammonia and urea in Al-Qaim
based on the newly-found natural gas. Please refer to the location of Akaz in the MAP of the
Iraq.
For reference, the trend in the chemical fertilizer industry in Iraq and an overview of SCP
and its operational status are provided later in Chapters 5 and 6, respectively.
4.7.5 Projects concerning the Industry and Minerals Sector in Anbar Province
During the period of the meeting in Amman, the Iraqi counterpart brought up the following
three as projects concerning the Industry and Minerals sector in Anbar Province.
(1) Rehabilitation of the phosphate fertilizer factory in Al-Qaim

(2) Rehabilitation of the glass factory in Ramadi
(3) Construction of a new ammonia and urea plant
The Government of Iraq has already submitted official requests for yen loan to the
Government of Japan (JICA) with regard to Projects (1) and (2). Project (3) for constructing a
new ammonia and urea plant is pursued concurrently with Project (1).
Among the above three projects, the reason why the rehabilitation of the phosphate fertilizer
factory in Al-Qaim is prioritized was confirmed by the Iraqi counterpart as follows;
- The improvement of food situation is politically urgent issue from viewpoints of both
central government and provincial governments of Iraq.
- State Company for Phosphate has good market for additional production level after
rehabilitations.
- Provided the rehabilitation project of Al-Qaim is materialized, it could potentially solve

the problem of unemployment.
4-27
In addition to the above, the reason why the Iraqi government is looking for Japanese ODA
Loan to be provided especially for the rehabilitation of the phosphate fertilizer factory in
Al-Qaim was clarified as follows;
- Expected rehabilitation cost of Al-Qaim complex is relatively higher than other two
industries (cement industry and glass & ceramic industry).
- To execute the rehabilitation of Al-Qaim complex is difficult in the manner of

investment by domestic and foreign private enterprises.
- The Iraqi government expect the Japanese companies to take up the modernization of
the existing facilities.
During the workshop meeting between the Iraqi counterpart and the Study Team, the
methodologies of modernization of Al-Qaim complex were discussed. As for the location for
the modernization project, the Iraqi counterpart affirmed that there is no possibility to newly
construct phosphate fertilizers complex outside the existing Al-Qaim complex area, taking into
consideration of the availability of basic infrastructure and residential environment for workers
of the complex. The Study Team indicated that in such case, Al-Qaim complex may be forced
to completely stop its production during the rehabilitation, while idea of the Iraqi counterpart for
this concern is that demand peak of P-Fertilizer might be limited to be in winter season and they
can build inventories or alternatively import as an emergency solution.
When Study Team compare the rehabilitation of Al-Qaim complex and new construction of
the similar complex at other location, the following factors have to be considered as the
prevailing conditions of rehabilitation.
1. Economical condition:
2. Existing utility supply facility availability (water / electricity etc.):

order.
3. Existing wastes handling facility availability (gypsum / waster water etc.):

effective.
4. Existing infrastructure (road / railway etc.):

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5. Work force availability (for operation and maintenance):

Al-Qaim complex keeps enough manpower to execute the rehabilitation project. If the
other location is selected, it would be more difficult to obtain work force and it will cost
more.
6. Feedstock delivery conditions (other than phosphate rock):

7. Other conditions and restriction, if any:

4-29
Chapter 5
Market Trend of Chemical Fertilizer Industry

5.1 Global Market Trend of Chemical Fertilizer Industry
Fertilizers can be divided broadly into chemical and organic fertilizers. A chemical
fertilizer is chemically produced and its production history dates back to the mid-19th to early
20th centuries. It is to supplement nitrogen, phosphoric acid and potassium that are most
essential nutrients for plants. The establishment of synthetic/production techniques increased
the agricultural production drastically and greatly contributed to world’s stable food supply
policies in the times when food supply was unstable due to the population increase after
Industrial Revolution to lay the foundation of economic development in various countries.
Food security to maintain lives of humans is essential as a basis of growth and further
development of a variety of industries for the restoration of a country and continuing stability
and prosperity. It is not hard to imagine how chemical fertilizer industry that assists the food
security is needed for the restoration of Iraq.
In discussing the development scenarios of the mining and manufacturing sector (chemical
fertilizer sector, in particular) in Mid-Western Iraq that is the target site of the survey, global
trend of chemical fertilizer industry is observed first. Understanding of product features,
supply-demand balance and distribution mechanisms of the products and awareness of recent
industry trend will help study the future course of chemical fertilizer industry in Iraq.
5.1.1 Nitrogen Fertilizer
(1) Supply-Demand Balance
Because the major raw material of typical nitrogen fertilizers is ammonia in urea,
ammonium sulphate and ammonium nitrate, focus is placed on the supply-demand balance of
ammonia.
Ammonia is a gas chemical produced by the reaction between nitrogen and hydrogen with
high pressure. About 80 percent is used as raw materials for agricultural use (nitrogen
fertilizer) and the rest for industrial use.
Because a gas transportation method with low temperatures and high atmospheric pressure
is required, transportation of ammonia itself for a long distance is not common. It is usually
produced and consumed in the same area (inductive product mainly composed of urea is
produced and consumed at the same place) and distribution of inductive products mainly
composed of ammonia is most common. Distribution of ammonia itself at the global level
accounts for only around 10 percent of production.
5-1
World demand of ammonia reached 150 million tons in 2008. It is expected to grow at the
rate of 2 to 4 percent per annum for the next 10 years to reach 180 million tons in 2017 due to a
world population increase. When the production capacity, real production and demand by
region is looked at, China produces about 40 percent of global production, being the biggest
consumer of ammonia, followed by Europe and former Soviet Union. As for the distribution
of ammonia alone that accounts for approximately 10 percent of all production, former Soviet
Union, Republic of Trinidad and Tobago and the Middle East are major exporters (they have
developed and grown for their supply capacity and price competitiveness of natural gas that is
used as the main raw material of ammonia), while major importers are the United States and
India where the demand for fertilizers have grown due to a population increase and the Far East
where there is demand of ammonia for industrial use.
Figure 5.1-1: Ammonia Demand by Use

(Source: Compiled by Study Team based on International Fertilizer Industry Association)
5-2
Figure 5.1-2: Distribution Map of Ammonia Production Capacity and Volume (2008)
(Source: Compiled by Study Team based on FERTECON Ammonia OUTLOOK)
Figure 5.1-3: Overview of Major Importers and Exporters of Ammonia (2008)

(Source: Compiled by Study Team based on FERTECON Ammonia OUTLOOK)
5-3
As for urea, approximately 140 million tons is consumed annually for agricultural fertilizers.
China, India and North America account for about 60 percent of the consumption.
Approximately 25 percent of the production is distributed via the market and this is also
expected to increase at the rate of 1.6 percent per annum to reach 45 million tons in 2020
because of the demand in India and North America and other countries where agriculture is one
of their key industries for their food security policy as well as in European countries that are
requested to take a drastic measure to reduce Nox emissions from gas power plants and diesel
engine automobiles.
Figure 5.1-4: Map of Urea Production and Consumption Volumes (2007)

(Source: Compiled by Study Team based on FERTECON Urea OUTLOOK)
5-4
395
34
CANADA
59
Nether 64 240 369 707419
-lands 796
796
E.U 281
Germany
Qatar China
1254 Oman 1,788

Kuwait
Egypt
17
FE.Asia U.S.A
Baharain
423
72 10
791 3 451
142 102 1,89 Thailand Trinidad
5 Philippine
Saudi 169 173
Africa Arabia
269 21 552 Venezuela
198 245 India 102 10 68
Pakistan Malaysia 222
3 196 192
Bangladesh 338
L.America
136
Brazil
98 85
99
15 38
237 107
182 3 1
132 192
Chile
Australia
184 51 Argentin
76 New 43
Zealand
297 238
477
Figure 5.1-5: Overview of Major Urea Importers and Exporters (2007)

(Source: Compiled by Study Team based on FERTECON Urea OUTLOOK)
(2) Price Trend
As described above, the major ingredient of ammonia is nitrogen in natural gas. Because
the cost of the raw material accounts for a large portion of total production cost, the ammonia
price is heavily influenced by Henry Hub (US) and other global natural gas market trend in the
long run. In addition, supply-demand balance of ammonia, market trend of such inductive
products as urea, and seasonal factors affect the price in the short run.
The ammonia price used to be around 200 U.S. dollars, before it rose from 2002 to the first
half of 2008 to hit the record high reaching 900 U.S. dollars. However, the price fell sharply
after the global financial crisis in October 2008 to below 200 U.S. dollars equivalent to the 1974
oil shock level temporarily. It seems to have hit the bottom and the price is assumed to be on a
recovery trend as the industrial demand is recovering and there is an indication of stability of
natural gas prices. In a cycle of price drop in spring and summer when demand declines and
price rise in autumn and winter when demand increases, the average price is estimated to
fluctuate between 300 to 400 U.S. dollars per ton.
5-5
Meanwhile, urea that is a final product and relatively easy to handle is treated for which
subsidies can be provided as part of their agricultural policy by the government of many
countries that consume the chemical. The price fluctuates in accordance with the fluctuation
of ammonia price as well as its supply-demand balance. It is estimated to be around 300 to
400 U.S. dollars on average.
Figure 5.1-6: Trend of Natural Gas, Ammonia and Urea Prices (USD/ton)
(Source: Compiled by Study Team based on FERTECON Ammonia/Urea)
(3) Future Market Forecast
Due to the global financial crisis in October 2008, import demand for industrial use in the
United States and Far East dropped sharply and the global import demand for ammonia declined
by 4 to 6 percent in 2009 from the year earlier. The price drop of grains influenced urea and
other fertilizer prices. Demand for ammonia decreased in areas that judged that the cost of
ammonia that is a raw material of fertilizers cannot be covered by the fallen sales prices of
fertilizers. This affected not only Europe with less production cost competitiveness but the
production system of other major importers including Republic of Trinidad and Tobago.
However, in the future, demand for agricultural fertilizers is forecast to increase due to a
global population increase especially in India and demand for industrial use is also expected to
recover in the Far East — 160 million tons of demand in 2010 is expected to exceed 190 million
tons in 2020. Import is believed to be recovering gradually in line with the demand increase.
New plants under construction (or under planning) mainly in the Middle East and North Africa
where raw materials can be obtained inexpensively are estimated to become major exporters.
Ammonia demand is estimated to increase steadily due to a global population increase,
5-6
improvement of quality of life as a result of economic growth and food security policy related to
the economic growth in the long run, although the import demand growth may slow down
temporarily for reasons described below. The production capacity is expected to increase by
approximately 40 million tons by 2020.
Potential factors that hinder demand growth are, as stated below, self consumption of
ammonia and decline of demand of downstream products. Export-oriented plants will need to
enhance its price competitiveness by leveraging raw material cost and access to consumption
sites.
① Construction of ammonia-urea integrated plants and MAP and DAP in ammonia

producing countries become the mainstream and self consumption of ammonia further
increases.
② Production of ammonium nitrate that is the major product of importation of ammonia

for industrial use tends to decrease due to its safeness. However, use of ammonium
nitrate accounts for a very small portion of the total and the impact is estimated to
minor.
5.1.2 Phosphate Fertilizer
Phosphate fertilizers refer to fertilizers mainly consisting of phosphate rocks. In this report,
however, focus is placed on phosphate rocks, DAP, MAP and TSP.
A total of 90 percent of phosphate rocks are in the form of sedimentary rocks formed in the
process of phosphorus in seawater settled and deposited biochemically on seabed by the act of
microorganisms. The rest is largely divided into igneous phosphate rocks formed by refined
phosphorus-containing magmas that erupted and guano phosphate rocks. The quality
significantly differs by production site and generating process. The phosphate rocks that can
be used by consumers are not like other such commodities as fertilizers partly because of the
differences in the production method at the plant.
The proven reserve of phosphate rocks is estimated to be 50 billion tons and more than 30
countries extract the resources. The top 15 nations account for nearly 95 percent of the output.
The top three nations, the United States, China and Morocco, account for about two-thirds of the
total output. This shows that the ores are very unevenly located limited mineral resources.
Of major producers of North America, China, Africa, the Middle East and Russia, such
countries as Morocco (45 percent of all exports) and Jordan in North Africa and the Middle East
have the capacity to export. The top five exporters (Morocco, Jordan, Syria, Russia and
5-7
Algeria) account for about 80 percent of all export. As of 2008, economic reserve in the world
was 18 billion tons and the annual production volume was approximately 175 million tons.
Figure 5.1-7: Map of Phosphorus Ore Reserve (2008)

(Source: Compiled by Study Team based on U.S geological Survey)
Figure 5.1-8: Map of Phosphorus Ore Annual Extraction (2008 actual /2013 forecast)
(Source: Compiled by Study Team based on FERTECON Phosphate Rock OUTLOOK)
5-8
Figure 5.1-9: Overview of Phosphorus Ore Exporters (2008 actual /2013 forecast)
Figure 5.1-10: Overview of Phosphorus Ore Importers (2008 actual /2013 forecast)
5-9
Of major phosphate fertilizers (DAP/MAP/TSP), DAP is the biggest in production and trade
volumes. DAP production in 2008 was 26.2 million tons and their main producers were the
United States, China, India, Russia and North Africa. About 40 percent of the production is
traded. Of DAP producers, the United States, Morocco and Jordan that are producers of
phosphate rocks have the capacity to export. The United States is very strong, accounting for
about 50 percent of both the production and export volumes. China, which is the world’s
second biggest consumer of phosphate fertilizers, has enhanced its production recently to export
1 million to 2 million tons per annum.
Trade of MAP and TSP is limited. MAP production in 2008 was approximately 16.75
million tons, of which about 4 million tons were exported from such producers as the United
States, Russia and China to such consumers as Brazil and Canada. About 5.85 million tons of
TSP was produced in 2008 and 3.5 million tons were exported from such countries as China,
Tunisia and Israel to such consumers as Brazil and Bangladesh.
Figure 5.1-11: Map of DAP Production and Export Volumes (2007)

(Source: Compiled by Study Team based on Processed Phosphates Statistics)
5-10
Figure 5.1-12: Map of DAP Distribution (2007)

Figure 5.1-13: Map of MAP Production and Export Volumes (2007)

5-11
Figure 5.1-14: MAP of MAP Distribution (2007)

(2) Price Trend
Prices of phosphate rocks had been stable for a long period of time since the late 1970s to
2005 between 30 to 60 U.S. dollars per ton according to the FOB Casablanca price index.
However, the prices have risen sharply in line with other resource prices since 2005 due to the
pressed food supply-demand balance, an increase in demand for grains for bio ethanol, a global
population increase, and a speculation of fertilizer demand increase. The price index of FOB
Casablanca hit the peak of over 400 U.S. dollars per ton in summer 2008.
Later due to a sharp price fall after the global financial crisis, the price index of FOB
Casablanca is around 100 U.S. dollars per ton in March 2010.
The phosphate fertilizer categorized as commodities does not have a potassium-like

oligopoly market structure formed by producers. The prices fluctuate sharply because they are
more heavily influenced by short-term supply-demand, global economy, trend of major energy
prices and trend of prices of its major ingredients of phosphate rocks, sulfur and ammonia. In
2008, phosphate fertilizer prices rose fivefold as in the case of energy and other fertilizer prices.
5-12
The international DAP price nearly exceeded FOB 1,000 U.S. dollars. Later the FOB price
dropped to below 300 U.S. dollars per ton due to the global economic crisis and has recovered
to around 500 U.S. dollars per ton.
The demand for phosphate fertilizers is expected to grow mainly in India and China. The
demand of phosphate rocks, which are raw materials of the fertilizers, is also expected to
increase at the rate of approximately 1.7% per annum to reach 280 million tons in 2017. As
described above, phosphate rocks are natural mineral resources that distribute highly unevenly,
it is hard to imagine the entry of new producers. In recent years, in major producing countries,
there is a significant trend in the phosphorus exporting countries to restrict the export of the
mineral with low added values, prioritize consumption in their own countries due to the rising
resource nationalism and shift to production of value-added products by themselves. Major
exporting nations are likely to have a stronger impact on the phosphate fertilizer market.
Morocco : It maintains a stable position as phosphate supplier.

Jordan : Volume is gradually decreasing. There are many projects to develop
phosphate-derived products in the country.
US : The industry has restricted itself to suspend export of phosphate rocks
since 1997.
China : It exported 5 million tons in 2001. It began to impose export tariffs in
November 2006 and introduced an export quota system (1.5 million
tons per annum) in 2009 to prioritize supply for fertilizers in their own
country.
In relation to phosphate fertilizers, there is a plan to begin, around 2012, the operation of a
new DAP plant with annual production of 3 million tons in Saudi Arabia’s Ma’aden project.
This will increase the trade volume by nearly 30 percent of the current volume. Although this
is expected to soften the phosphate fertilizer market in a short run (excessive supply), the global
demand is estimated to continue to grow and the prices will grow steadily.
5.1.3 Potassium Fertilizer
Potassium is an essential mineral for organisms including the human body and plants. It is
one of the three fertilizer elements together with nitrogen and phosphate. The focus in the
report is placed on potash ores and potassium chloride and potassium sulphate.
5-13
Potash mines are unevenly located geographically across the world and the development of
new mines requires investment of several billion US dollar and sophisticated special techniques.
As a result, it is the oligopoly market formed by existing suppliers mainly consisting of Canada
and Russia. There are only 10 to 20 producing companies with capacity to export in the world.
Although there was overproduction for the last 30 to 40 years, recent consolidations of
producers have established a system to enable production adjustment to avoid excessive supply.
The plant operation rate has been around 90 percent.
Global demand for potassium chloride has grown at the rate of approximately 2 to 3 percent
per annum, and the demand in 2007 was 58 million tons. The demand is expected to continue
to increase pushed by the increase in food demand and grain demand for bio ethanol. Since the
demand is expected to increase in the future, expansion of production capacity is essential in the
long run.
Figure 5.1-15: Potassium Chloride Production Volume by Country (2007)

The annual global production capacity of potassium chloride was approximately 60 million
tons and actual production volume was 54 million tons as of 2008. About 75 percent is traded
in the market for exportation. The biggest importer is China that imports 10 million tons,
followed by Brazil (7 million tons) and India (5.5 million tons). Demand is expected to grow
at a higher rate particularly in Brazil and Asian countries.
5-14
Figure 5.1-16: Potassium Chloride Export and Import Volume (2007)

Potassium sulphate (K2SO4) mostly used for tobacco and vegetables is mainly produced by
adding sulphate to potassium chloride. Compared with potassium chloride, it is less oligopoly
market. Because its use is limited, it is a very unique product. Production volume is mere 5
million tons in the world. In addition to Germany (1 million tons) and Belgium (0.8 million
tons) that have long controlled the supply balance, such Asian countries as China, South Korea,
Taiwan, and the Philippines have increased production, enhancing their presence.
(2) Price Trend
Potassium fertilizer prices are decided mainly by such producing countries as Canada and
former Soviet Union because of the following two reasons:
1) Direct sales to customer (no traders between producers and consumers)
2) Easy adjustment of production volume because of oligopoly market
More specifically, the price decided by Japan and Canadian CANPOTEX every six months
is used as the standard for the Far East. Thus, Japan has reasonable presence although its
5-15
demand is only 650,000 tons, which accounts for 1.3 percent in the global market.
Since the global financial crisis in 2008, the prices have been on the decline trend.
However, because producers control plant operation, prices are expected to stabilize at around
300 to 400 U.S. dollars per ton.
As described above, new participation in the market is extremely hard because the
development of new potassium mines require enormous investment and special techniques,
although demand is expected to grow steadily. Thus, there is little possibility of significant
expansion of production capacity or an increase in supply volume. The oligopoly market
structure will be maintained and the supply and demand will be well balanced.
5-16
5.2 Trend of Chemical Fertilizer Industry in Iraq
5.2.1 Production Trend
Table 5.2-1: Production Trend of Chemical Fertilizer Industry in Iraq

(Ammonia, Urea)
Location, Time of
Establishment
(Ammonia, urea)
Plant No. 1 Ammonia: 200 t/d (66,000 t/y) Natural gas is it caused serious damage to production
Basra Urea: 160 t/d (52,800 t/y) supplied from North facilities. The opeation has been
(Abu-Al-Khaseeb) Ammonium sulfate: Rumaila Oil Field via competely suspended since 1980.
1969 420 t/d (138,599 t/y) a pipeline. Parts that can be used elsewhere were
supplied for Machine No. 3.
Plant No. 2
Basra Ammonia: 800 t/d (264,000 t/y)
Same as above Same as above
(Abu-Al-Khaseeb) Urea: 1,300t/d (429,000t/y)
1978
it caused serious damage to production
facilities. The opeation was suspended
Natural gas is
Plant No. 3 Ammonia: 1,000 t/d 2 lines after the outbreak. Production resumed
supplied from South
Basra (660,0000 t/y) in March 1988 immediately after the end
and North Rumaila
(Khur Al-Zubair) Urea: 1,600 t/d 2lines of the war. Although Gulf War II and
Oil Fields via a
1978 (1,056,000 t/y) later wars did not cause serious damage,
pipeline.
operation rate is low due to shortages of
parts and catalysts, at around 28 percent
in the case of urea, for example.
Ammonia: 1,000 t/d Natural gas is It is hard to conduct stable operation due
Plant No. 4
(330,000 t/y) supplied from Kirkuk to shortages of natural gas and electricity.
Baiji
Urea: 1,750 t/d Oil Field via a This has resulted in suspension of
1987
(577,500 t/y) pipeline. operation since April 2003.
Note
Urea: Total of design production capacity 2,115,300 t/y
Production volume in 2009 307,400 t/y (14.5 %)
5-17
Table 5.2-2: Production Trend of Chemical Fertilizer Industry in Iraq

Location, Time of
Establishment
Phosphate rocks are
transported by rail from
Although the Iran-Iraq War did not
Akashat Mines 170 kilometers
cause much damage, furious
Phosphate rocks: to the west. Sulfur is
airstrikes by allied forces in Gulf War
3.4 Million t/y transported from Mishaqyori
II caused tremendous damage to the
(22% P2O5) Sulfur Mine and oil refineries in
Plant No. 1 production facility. After that, it
TSP: 600,000 t/y the country. Natural gas to
Al-Qaim reduced the operation rate
(45% P2O5) produce ammonia is supplied
Akashat drastically. Furthermore, Gulf War III
MAP: 280,000 t/y from Kirkuk Oil Field via a
1976 in 2003 also caused more damage
Chemical fertilizer: pipeline.
and currently it hardly functions as a
NP 655,000 t/y However, the ammonia plant
production plant. It is inevitably in a
Ammonia: 50,000 t/y has completed closed since
situation where it needs to plan and
1990 and liquefied ammonia is
examine the rehabilitation.
transported from a fertilizer
plant in Baiji by tank truck.
Points:
1) Chemical fertilizer plants constructed in Iraq are shown in the table above. All the
production facilities are owned by state-owned companies.
2) Use of ammonia:
World supply-demand balance: Approx. 80% for fertilizers and 20 % for other
industrial use
Iraq: Mostly for fertilizers. Both Basra and Baiji plants consume most of ammonia
they produce for the production of urea. Although ammonium sulfate was
produced with Plant No. 1 at Basra, the operation has been completely
suspended. Although the Al-Qaim plant used to produce ammonia for MAP
production, ammonia production is currently suspended. To compensate it,
ammonia is obtained from the Baiji plant by tank truck.
3) Operation of Iraqi fertilizer plants:
As noted in the table above, the Iran-Iraq War that broke out in 1980 and ended in 1988
(also called Gulf War I), Gulf War II that broke out because Iraq invaded Kuwait from
August 1990 to February 1991, and Iraq War from March to May 2003 (also called Gulf
War III) caused serious damage to production plants and their operation has declined to
an extremely low level.
5-18
Out of fertilizers in Iraq in the table below, production and sales of urea fertilizers are
summarized, as they are major fertilizers in the country. As for production, the Khur Al Zubair
plant in Basra manages to maintain 30% level of operation rate. However, the rate of the Baiji
plant in the northern part dropped sharply in 2003 (67.7% in 2002 to 16.2% in 2003) and has
been zero since 2007. This is mainly because the gas pipeline was frequently damaged and
caused shortages of supply of natural gas that is a raw material of the fertilizers. In 2005, it
had no supply of natural gas for eight and nine months. Furthermore, there is a power supply
problem, which has led to zero production since 2007.
Table 5.2-3: Production and Demand Balance of Urea in Iraq

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
(Production)
Baiji Factory 209,299 252,256 235,214 203,594 392,200 93,881 76,121 58,149 10,795 0 0 0
(Capa；579,000 tons) Ope Rate% 36.1 43.6 40.6 35.2 67.7 16.2 13.1 10.0 1.9 0.0 0.0 0.0
Basra Factory(Khur Al Zubair) 388,503 454,308 454,701 554,811 597,661 99,167 262,713 226,744 300,907 232,253 300,235 307,409
(Capa；1,056,000 tons) Ope Rate% 37 43 43 53 57 9 25 21 28 22 28 29
Total 597,838 706,608 689,956 758,440 989,929 193,064 338,847 284,903 311,704 232,253 300,235 307,409
(Total Capacity 1,635,000 tons）
Total Operation Rate% 36.6 43.2 42.2 46.4 60.5 11.8 20.7 17.4 19.1 14.2 18.4 18.8
(Sales)
Baiji Factory 190,427 223,635 268,373 183,992 369,900 161,895 53,551 70,468 18,299 4,171 0 0
Basra Factory (Khur Al Zubair) 414,025 449,015 384,601 658,610 572,307 134,208 225,130 258,196 302,602 220,554 311,662 293,040
Total 604,452 672,650 652,974 842,602 942,207 296,104 278,680 328,664 320,902 224,725 311,662 293,040
(Breakdown of the Sales)
1) Sales to MOA
From Baiji Factory 159,428 144,360 64,506 109,855 185,855 40,876 38,984 58,468 7,777 3,200 0 0
From Basra (Khur Al Zubair) 335,061 298,549 73,881 216,888 353,533 82,496 190,192 246,677 299,698 220,001 302,900 267,091
Total 494,489 442,908 138,387 326,743 539,388 123,371 229,176 305,145 307,474 223,201 302,900 267,091
2) Sales to PS
From Baiji Factory 7,231 16,837 46,908 3,670 13,438 108,055 5,933 0 0 0 0 0
From Basra (Khur Al Zubair) 3,240 33,638 116,773 100,491 18,207 30,115 32,665 710 0 400 0 0
Total 10,471 50,474 163,680 104,161 31,645 138,170 38,597 710 0 400 0 0
3) Sales for Export
From Baiji Factory 6,942 7,359 51,796 20,351 86,386 10,614 0 0 0 0 0 0
From Basra (Khur Al Zubair) 13,782 68,221 135,039 253,140 116,759 6,491 453 0 0 0 3,328 0
Total 20,724 75,580 186,835 273,491 203,145 17,104 453 0 0 0 3,328 0
4) Sales to SCP
From Baiji Factory 12,411 20,378 16,049 9,981 34,464 884 321 10,312 10,523 971 0 0
From Basra (Khur Al Zubair) 58,749 46,192 55,622 84,612 81,109 15,107 0 0 2,855 89 5,000 25,904
Total 71,160 66,569 71,671 94,593 115,573 15,992 321 10,312 13,378 1,060 5,000 25,904
5) Sales to Others
From Baiji Factory 4,415 34,702 89,114 40,136 49,757 1,466 8,313 1,687 0 0 0 0
From Basra (Khur Al Zubair) 3,193 2,417 3,286 3,479 2,700 0 1,820 10,810 50 64 434 45
Total 7,608 37,119 92,400 43,615 52,457 1,466 10,133 12,497 50 64 434 45
The table above is shown in the figures below to have it more easily understood.
5-19
Iraq Urea Production

1,200,000
1,000,000
800,000
Tons
600,000
400,000
200,000
0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Year
Figure 5.2-1: Trend of Urea Production by Plant in Iraq

Iraq Urea Sales

1,000,000
800,000
600,000
Tons
400,000
200,000
0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Year
Figure 5.2-2: Trend of Urea Sales by Plant in Iraq

5-20
Breakdown of Iraq Urea Sales

1,000,000
800,000
600,000
Tons
400,000
200,000
0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Year
To MOA To PS For Export To SCP To Others Total
Figure 5.2-3: Trend of Urea Sales by Purchaser in Iraq

5.2.2 Demand Trend
1) Ammonia:
As described earlier, most of ammonia produced in Iraq is consumed for urea production at
their plants (Khur Al-Zubair plant in Basra and Baiji plant in northern Iraq).
MAP is required for the production of compound chemical fertilizers, NP (N:P 27:27), at the
phosphate fertilizer plant at the Al-Qaim plant. MAP production also needs ammonia.
However, the plant cannot produce ammonia and thus it is transported from Basra and Baiji.
The required amount is estimated as follows based on the production volume of NP at the
Al-Qaim plant: (Production of 1 ton of NP requires 0.51 ton of MAP and production of 1 ton
of MAP requires 0.144 ton of ammonia.)
Yr 2000 ; 16,760 tons
Yr 2001 ; 18,164 tons
Yr 2002 ; 25,214 tons
2) Use of urea in general
Urea is most used for fertilizers (approximately 90 percent for fertilizers and approximately
10 percent for other purposes, according to world average) and it is the most common nitrogen
fertilizers. (Approximately 65 percent of nitrogen fertilizers is urea.)
5-21
Because most fertilizers are water soluble, its toxicity to fish and other living matters needs
to be taken into consideration. Because urea has low toxicity, it is used for a wide variety of
crops. However, attention needs to be paid to groundwater contamination. Use efficiency
has been improved recently and usage per unit tends to be lowered.
3) Urea demand in Iraq
All urea is consumed for fertilizers in Iraq.
Annual demand of urea in Iraq has increased as follows:
Just before Iran-Iraq War in 1980: Approx. 50,000 tons
In the first half of 1990s: Approx 70,000 tons
1998 to 2000: Approx 650,000 tons
2002: Approx 942,200 tons
However, urea production has decreased sharply because of Gulf War III in March to May
2003 (collapse of the Saddam Hussein’s regime after airstrikes by allied forces led by the US
and the UK) that caused much damage to a wide range of production facilities and infrastructure
as well as long-lasting instability of public safety in the country. Annual urea production for
the last six years has been low at about 300,000 tons.
The Government of Iraq has a policy to manage urea domestic consumption without
depending on importation. In Iraq, oil exportation was restricted because of the economic
sanctions imposed by the international community (1990-2003), which resulted in a shortage of
foreign currencies to put the country in the situation where it cannot import goods during the
period. As a result, it had to depend on the limited domestic production and it had no other
choice but to apply an absolutely small amount of fertilizers.
There is an urgent need to recover the domestic fertilizer production at the earliest possible
date. However, in reality, there is a shortage of domestically produced farm products.
According to SCF data in 2002, the Iraqi grain self-sufficiency rate dropped to 33%, with 67%
percent managed by grain import and food aid.
4) Phosphate fertilizer demand in Iraq
-1: General remarks;

For the cultivation of the crops, nitrogen, phosphate and potassium are considered as the
most important nutrients. Each nutrient has its own characteristics and uses.
5-22
Quantitatively, phosphate fertilizer is the second largest fertilizer next to nitrogen.
As for the uses and the effectiveness of phosphate fertilizers manufactured by SCP,
including Triple Super Phosphate (TSP), Mono-ammonium Phosphate (MAP) and NP
(Compound fertilizer), are as follows;
TSP; It is hard to dissolve in water and suitable for acid soil, volcanic ash soil and soil
improvement of poor soil. It dissolves and is absorbed in the organic acid in
root crop. It has a slow-acting effect.
MAP; Mix ratio of nitrogen and phosphorus in MAP is excellent and it is an essential
fertilizer for the growth in the early stage of various crops. It is also frequently
used as the intermediate as raw materials of compound fertilizers.
NP; Fertilizers whose total contents of nitrogen, phosphate and potassium exceed 30
percent are called compound fertilizers. In the case of SCP, the nutrient content
ratio of NP is N:P = 27:27. The N:P:K ratio of NPK is 18:18:18.
What is important in selecting a compound fertilizer is the balance of the three
nutrients. Horizon-type fertilizers with well-balanced contents of the three
nutrients are suitable as base fertilizers and the mountain type with high contents
of phosphate is suitable as base fertilizers for long-term crops (fruit vegetables,
root vegetables and flowers) that require a large amount of phosphate.
Valley-type fertilizers with low contents of phosphate are suitable as base
fertilizers for leafy vegetables with a short growing period as well as for
top-dressing.
-2 Iraqi phosphate fertilizer plants

It is obvious that effective use of phosphate fertilizers is the essential matters for the food
production increase. The Government of Iraq began the production of phosphate fertilizers
at the Al-Qaim plant in 1976 assumably because it recognized its importance for the food
production. It is undoubtable that the government made the decision because a large volume
of phosphate rocks used as raw materials for the fertilizers can be produced in Akashat
approximately 170 kilometers southwest of Al-Qaim.
-3. Demand forecast of phosphate fertilizers in Iraq by accumulation method

It is not so easy to identify the demand of phosphate fertilizers in Iraq, because there are
many uncertainties and thus it requires the examination of various issues—correct
5-23
understanding of soil quality of cultivated land in Iraq, understanding of a careful plan of

what type of crop is produced where, consideration of alternatives to other types of fertilizers,
and demand for export in some cases. In this survey, as for these important factors we could
not find effective data. Accordingly, it is very hard to obtain a feasible demand forecast of
Iraqi phosphate fertilizer based on such an accumulation method.
-4. Demand forecast of phosphate fertilizers in Iraq by inductive method
Table 5.2-4: Fertilizer Consumption by Nutrient and Regions

Area and Country N-Fertilizers P-Fertilizers K-Fertilizers Grand Total
85,500 33,800 23,600
World Total 142,900
(1.00) (0.39) (0.28)
America Total 15,900.5 7,898.8 8,270.7
32,070
(N.C.S. America) (1.00) (0.49) (0.52)
10,876.5 3,321.1 3,888.9
Europe 18,077.5
(1.00) (0.31) (0.36)
2,893 1,059.3 248
Middle East 4,200.3
(1.00) (0.37) (0.08)
884.2 305.5 101.7
Iran 1,291.4
(1.00) (0.42) (0.11)
510.7 127.4 0.7
Iraq 638.8
(1.00) (0.25) (0.0014)
(Source: Compiled by Study Team based on FAO data in 2003)
The unit used for each fertilizer in the table is 1,000 tons of nutrient. Namely,
consumption volume of nitrogen fertilizers is shown by the nitrogen content in the
fertilizers and phosphate & potassium fertilizers are shown by the content of P2O5
and K2O respectively.
Figures in the parentheses means the consumption ratio of fertilizers when the
consumption volume of nitrogen fertilizer is assumed as 1.
Generally speaking, as shown in the table 5.2-3, it is experientially recognized that the
consumption ratio of three basic fertilizers has some specific relation. It is roughly
estimated that consumption ratio of phosphate fertilizer against nitrogen fertilizer ranges from
30 to 40 %.
However, in the case of Iraq, phosphate fertilizer consumption ratio, actually 25% against
nitrogen fertilizer consumption, is lower than most other regions and countries. Considering
the similar weather and soil situations, Iraq’s figure should be closer to the figures of total
Middle East of 37% and Iran of 42%. Based on such inductive method, it will be expressed
5-24
that Iraq will have to raise the consumption ratio of phosphate fertilizers in future.
-5. SCP operation results

Phosphate fertilizer production at the Al-Qaim plant was close to zero from around 2004
to 2006. Specifically, production of TSP and MAP was zero and NP was about 80,000 tons
(around 12% of design capacity) during the period. The shortage cannot be offset by the
importation mainly because of the shortage of foreign currency and the governmental policy
not to rely on the foreign products.
The reality in recent years is that there was absolute produceable volume first and then
demand could not exceed it. This idea is clearly stated about urea fertilizers and it is fair to
say that the government took the same approach for phosphate fertilizers because there was
no importation of phosphate fertilizers recently.
.
-6. SCP design capacity
The following shows the figures of SCP phosphate fertilizer design capacity and it has
probably been considered that these design capacity are roughly equal to the Iraqi domestic
demand because the Iraqi Government might have considered that the local demand should
be fulfilled by the local products. Actually, however, because of many troubles, real
production volumes were far below than these design capacity:
(Design Capacity ) (Converted volume into P2O5)
TSP 600,000 tons (45% P2O5), 270,000 tons
MAP 280,000 tons (52% P2O5) 145,600
NP 655,000 tons ( 27% P2O5) 176,850
Total 592,450
It will be helpful to compare above figures with the estimated domestic urea
consumption.
In chapter 5.3.3, annual urea domestic consumption is estimated as 2,000,000 tons,
converted amount into nitrogen nutrient is 900,000 tons.
In this case, consumption ratio of phosphate fertilizer against nitrogen fertilizer is about
66%, which is larger weight compared with the global results. However, it will not be easy
to keep such complete consistency because both figures were arranged based on the different
conditions.
5-25
-7. SCP forecast of Iraqi domestic demand of phosphate fertilizers

SCP forecast of domestic demand for phosphate fertilizers, compiled by SCP for the
Al-Qaim plant rehabilitation plan in April 2009, can be used as a reference material for the
domestic demand of phosphate fertilizer. According to the estimation based on studies
adapted by Ministry of Agriculture, annual domestic demand for TSP and NP are 600,000
tons and 1,250,000 tons, respectively. As for the demand for TSP, it is identical with the
design capacity of the Al-Qaim plant. As for NP demand, SCP forecast is about two times
higher than the SCP plant design capacity, which means that the local coverage ratio is only
47%. Again, in the last few years, actual NP production was about 2.5 % to 22.5 % of
design capacity. Its record high figure was 62 % in the year of 1993. In this estimation, at
first, realization of full design capacity volume is necessitated and, secondly, similar amount
will have to be procured from outside. With regard to the basis of this estimation, no
specific explanation has been expressed, so it might be only the expected amount. On the
contrary, it might be necessitated to forecast based on more realistic situation.
5.2.3 Fertilizer Production, Consumption and Trade in Iraq’s Neighboring Countries

and Other Major Countries
Just for reference, global production and consumption of major fertilizers in other countries
are introduced here. Although the data is somewhat old, FAO (UN Food and Agriculture
Organization) data in 2003 is summarized as follows: This shows a global trend of fertilizer
production and consumption. (As for Iraqi fertilizer supply/demand balance, year of 2002 was
the latest normal year. Accordingly, it is probably said that this data of 2003 would be the most
feasible ones for this report purpose.)
The unit used for each fertilizer in the tables is 1,000 tons in ingredients, which means
nitrogen for nitrogen fertilizers, P2O5 for phosphate fertilizers and K2O for potassium fertilizers.
Thus, it should be noted that the indications are different from the regular production volume of
fertilizers.
For example, nitrogen content in urea is 46% and thus 100 tons of urea contains 46 tons of
nitrogen. In other words, 100 tons of urea in the tables is equivalent to 217 tons of urea in the
indication of urea production volume. Similarly, 100 tons of TSP contains 46 tons of P2O5 and
thus 100 tons of TSP production volume in the tables is equivalent to 217 tons of TSP
production volume in regular indications.
5-26
Table 5.2-5: Breakdown of Production Volume of Major Fertilizers by Country

Nitrogen Phosphate Potash
Urea AS AN CAN Others N. Total MAP,DAP SSP TSP Others P. Total KCL PS PN Po. Total Grand T
(Middle East)
Saudi Arabia 1,260.4 61.0 0.0 0.0 7.1 1,328.5 155.9 0.0 0.0 12.2 168.1 0.0 0.0 0.0 0.0 1,496.6
( Al Jubayl)
Bahrain 290.3 0.0 0.0 0.0 0.0 290.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 290.3
Iran 623.2 2.2 60.7 0.0 81.8 767.9 116.9 5.9 0.0 23.9 146.7 0.0 0.0 0.0 0.0 914.6
Iraq 460.0 0.0 0.0 0.0 64.0 524.0 0.0 0.0 62.5 70.0 132.5 0.0 0.0 0.0 0.0 656.5
Israel 0.0 0.0 0.0 0.0 75.0 75.0 13.0 72.1 94.0 70.0 249.1 1,918.0 0.0 0.0 1,918.0 2,242.1
Jordan 0.0 0.0 0.0 0.0 133.0 133.0 255.6 0.6 0.0 21.0 277.2 1,173.6 0.0 0.0 1,173.6 1,583.8
Kuwait 255.3 0.0 0.0 0.0 0.0 255.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 255.3
Qatar 798.6 0.0 0.0 0.0 0.0 798.6 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 798.6
Turky 247.0 40.8 32.4 249.7 64.5 634.4 75.2 0.0 26.0 200.0 301.2 0.0 0.0 0.0 0.0 935.6
UAE 277.0 0.0 0.0 0.0 0.0 277.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 277.0
M.E. total 4,211.8 104.0 93.1 249.7 425.4 5,084.0 616.6 78.6 182.5 397.1 1,274.8 3,091.6 0.0 0.0 3,091.6 9,450.4
(Africa)
Algeria 0.0 0.0 98.2 0.0 20.0 118.2 0.0 5.0 21.8 9.0 35.8 0.0 0.0 0.0 0.0 154.0
Egypt 1,078.2 22.1 448.1 0.0 0.0 1,548.4 0.0 167.4 19.6 0.0 187.0 0.0 0.0 0.0 0.0 1,735.4
Morocco 0.0 0.0 0.0 0.0 349.5 349.5 911.1 8.0 249.5 62.0 1,230.6 0.0 0.0 0.0 0.0 1,580.1
South Africa 0.0 35.9 0.0 114.5 148.0 298.4 142.6 0.0 0.0 137.4 280.0 0.0 0.0 0.0 0.0 578.4
Tunisia 0.0 0.0 57.1 0.0 224.9 282.0 528.5 10.0 351.9 2.0 892.4 0.0 0.0 0.0 0.0 1,174.4
Africa total 1,078.2 58.0 603.4 114.5 742.4 2,596.5 1,582.2 190.4 642.8 210.4 2,625.8 0.0 0.0 0.0 0.0 5,222.3
(Asia)
China 14,048.0 230.5 235.0 3.7 9,127.1 23,644.3 2,039.0 3,773.4 177.0 1,922.9 7,912.3 430.0 0.0 0.0 430.0 31,986.6
India 8,614.4 112.7 0.0 43.5 1,786.9 10,557.5 2,408.6 379.7 0.0 1,113.9 3,902.2 0.0 0.0 0.0 0.0 14,459.7
Indonesia 2,762.8 88.2 0.0 0.0 16.8 2,867.8 0.0 0.0 199.0 16.8 215.8 0.0 0.0 0.0 0.0 3,083.6
Japan 233.0 315.0 18.8 0.0 103.2 670.0 0.0 10.0 5.2 363.0 378.2 0.0 0.0 0.0 0.0 1,048.2
Korea 99.2 112.7 0.0 0.0 147.8 359.7 130.0 0.4 0.0 222.5 352.9 0.0 0.0 0.0 0.0 712.6
Pakistan 2,025.8 0.0 0.0 87.1 70.4 2,183.3 30.8 26.4 0.0 72.9 130.1 0.0 0.0 0.0 0.0 2,313.4
Viet Nam 49.2 0.0 0.0 0.0 0.0 49.2 0.0 145.0 0.0 70.0 215.0 0.0 0.0 0.0 0.0 264.2
Uzbekistan 98.0 30.9 422.8 0.0 71.3 623.0 100.6 24.0 0.0 0.0 124.6 0.0 0.0 0.0 0.0 747.6
Asia total 27,930.4 890.0 676.6 134.3 11,323.5 40,954.8 4,709.0 4,358.9 381.2 3,782.0 13,231.1 430.0 0.0 0.0 430.0 54,615.9
(Europe)
Austria 4.0 0.0 0.0 170.0 69.0 243.0 0.0 7.6 8.0 67.0 82.6 0.0 0.0 0.0 0.0 325.6
Bel-lux 0.0 299.0 48.0 415.0 68.0 830.0 0.0 26.0 26.0 193.0 245.0 0.0 0.0 0.0 0.0 1,075.0
Belarus 432.8 59.9 88.5 0.0 44.8 626.0 25.2 0.0 25.0 34.0 84.2 3,791.0 0.0 0.0 3,791.0 4,501.2
Bulgaria 76.3 0.0 236.7 0.0 13.7 326.7 0.0 0.0 108.0 12.2 120.2 0.0 0.0 0.0 0.0 446.9
France 178.0 1.0 322.0 105.0 500.0 1,106.0 0.0 40.0 25.0 212.0 277.0 130.0 0.0 0.0 130.0 1,513.0
Lithuania 168.4 0.0 178.8 0.0 243.8 591.0 302.0 0.0 0.0 57.7 359.7 64.2 0.0 0.0 64.2 1,014.9
Netherlands 55.0 98.0 54.0 614.0 192.0 1,013.0 0.0 14.0 30.0 130.0 174.0 0.0 0.0 0.0 0.0 1,187.0
Poland 264.3 131.3 374.5 258.6 148.0 1,176.7 208.0 17.4 30.0 212.5 467.9 0.0 0.0 0.0 0.0 1,644.6
Romania 406.2 6.1 245.3 10.8 137.7 806.1 9.5 0.0 0.0 72.7 82.2 0.0 0.0 0.0 0.0 888.3
Russia 1,872.7 297.4 2,366.7 0.0 1,474.6 6,011.4 1,581.9 3.6 0.0 816.7 2,402.2 4,380.0 0.0 0.0 4,380.0 12,793.6
Spain 159.4 104.7 141.0 172.2 225.2 802.5 158.2 6.2 0.0 230.5 394.9 407.0 0.0 0.0 407.0 1,604.4
UK 0.0 0.0 278.0 0.0 262.0 540.0 0.0 0.0 0.0 50.0 50.0 540.0 0.0 0.0 540.0 1,130.0
Ukraine 1,427.0 59.1 525.1 0.0 302.3 2,313.5 22.0 13.0 0.0 7.3 42.3 9.0 0.0 0.0 9.0 2,364.8
Germany 350.0 160.0 0.0 310.0 193.3 1,013.3 0.0 13.0 0.0 24.0 37.0 3,451.0 0.0 0.0 3,451.0 4,501.3
Italy 158.0 80.0 14.0 81.0 90.0 423.0 0.0 24.0 0.0 25.0 49.0 0.0 0.0 0.0 0.0 472.0
Europe total 5,552.1 1,296.5 4,872.6 2,136.6 3,964.4 17,822.2 2,306.8 164.8 252.0 2,144.6 4,868.2 12,772.2 0.0 0.0 12,772.2 35,462.6
(Oceania)
Australia 51.5 88.0 11.0 0.0 180.5 331.0 346.0 332.8 0.0 44.0 722.8 0.0 0.0 0.0 0.0 1,053.8
(America)
Canada 1,940.0 0.0 413.1 0.0 1,483.2 3,836.3 296.4 0.0 0.0 0.0 296.4 8,027.4 0.0 0.0 8,027.4 12,160.1
Mexico 0.0 207.0 71.9 0.0 100.3 379.2 183.0 22.3 96.9 25.0 327.2 0.0 0.0 0.0 0.0 706.4
USA 2,044.3 619.3 1,055.6 0.0 5,723.1 9,442.3 7,058.6 4.8 456.1 447.5 7,967.0 696.4 0.0 0.0 696.4 18,105.7
Brazil 421.7 44.6 133.7 0.0 152.4 752.4 479.0 769.8 157.6 73.6 1,480.0 376.3 0.0 0.0 376.3 2,608.7
Venezuela 418.4 17.7 0.0 0.0 103.4 539.5 38.0 0.0 0.0 22.0 60.0 0.0 0.0 0.0 0.0 599.5
Chile 0.0 0.0 0.0 0.0 115.0 115.0 0.0 0.0 0.0 0.0 0.0 409.0 0.0 0.0 409.0 524.0
America total 4,824.4 888.6 1,674.3 0.0 7,677.4 15,064.7 8,055.0 796.9 710.6 568.1 10,130.6 9,509.1 0.0 0.0 9,509.1 34,704.4
Total 43,648.4 3,325.1 7,931.0 2,635.1 24,313.6 81,853.2 17,615.6 5,922.4 2,169.1 7,146.2 32,853.3 25,802.9 0.0 0.0 25,802.9 140,509.4
Share(%) 53.4 4.1 9.7 3.2 29.6 100.0 53.6 18.0 6.6 21.8 100.0 100.0 0.0 0.0 100.0
World Total 87,206.0 33,909.0 25,853.0 146,968.0
(Source: Compiled by Study Team based on FAO data)
Similarly, the following table shows a summary of consumption volume of major fertilizers
by country.
5-27
Table 5.2-6: Breakdown of Consumption Volume of Major Fertilizers by Country

Nitrogen Phosphate Potash
Urea AS AN CAN Others N. Total MAP,DAP SSP TSP Others P. Total KCL PS Others Po. Total Grand T
(Middle East)
Saudi Arabia 163.0 0.0 0.0 0.0 61.0 224.0 125.0 0.0 0.0 7.3 132.3 0.0 0.0 25.0 25.0 381.3
( Al Jubayl)
Bahrain 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Iran 708.0 8.7 60.7 0.0 106.8 884.2 160.8 5.9 109.8 29.0 305.5 9.1 47.0 45.6 101.7 1,291.4
Iraq 439.2 0.0 0.0 0.0 71.5 510.7 7.1 0.0 51.6 68.7 127.4 0.7 0.0 0.0 0.7 638.8
Israel 17.3 4.9 0.0 0.0 18.3 40.5 0.0 0.0 0.0 9.2 9.2 9.0 0.0 22.6 31.6 81.3
Jordan 5.0 1.6 1.4 0.0 6.0 14.0 2.5 0.6 0.0 7.4 10.5 1.0 0.0 8.0 9.0 33.5
Kuwait 1.0 0.0 0.0 0.0 0.0 1.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.0
Qatar 0.1 0.0 0.0 0.0 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1
Turky 330.5 62.1 221.1 248.8 332.5 1,195.0 176.5 0.0 10.5 287.4 474.4 0.0 5.0 68.5 73.5 1,742.9
UAE 20.0 0.5 0.0 0.0 3.0 23.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 6.5 6.5 30.0
M.E. total 1,684.1 77.8 283.2 248.8 599.1 2,893.0 471.9 6.5 171.9 409.0 1,059.3 19.8 52.0 176.2 248.0 4,200.3
(Africa)
Algeria 2.0 1.0 22.0 0.0 23.0 48.0 0.0 0.0 5.0 23.0 28.0 2.0 0.0 20.0 22.0 98.0
Egypt 588.0 53.9 425.6 0.9 0.0 1,068.4 0.0 142.1 0.0 0.0 142.1 0.0 57.0 0.0 57.0 1,267.5
Morocco 55.0 20.0 69.0 0.0 54.0 198.0 25.0 8.0 5.0 62.0 100.0 0.7 15.5 33.8 50.0 348.0
South Africa 337.3 37.5 0.0 109.8 86.2 570.8 160.0 0.0 1.0 70.2 231.2 26.0 2.0 135.1 163.1 965.1
Tunisia 0.0 0.0 47.6 0.0 8.4 56.0 18.7 0.0 21.2 1.1 41.0 0.0 5.0 0.0 5.0 102.0
Africa total 982.3 112.4 564.2 110.7 171.6 1,941.2 203.7 150.1 32.2 156.3 542.3 28.7 79.5 188.9 297.1 2,780.6
(Asia)
China 14,761.4 193.5 745.0 1.6 9,728.5 25,430.0 4,040.0 3,747.7 151.3 1,985.0 9,924.0 2,525.7 405.2 1,319.5 4,250.4 39,604.4
India 8,506.8 97.4 0.0 41.7 1,824.1 10,470.0 2,517.6 399.8 0.0 1,087.3 4,004.7 1,147.2 9.6 490.1 1,646.9 16,121.6
Indonesia 1,965.6 161.4 41.4 0.0 44.6 2,213.0 10.0 0.0 254.0 65.0 329.0 405.0 0.0 45.0 450.0 2,992.0
Japan 109.0 142.0 2.0 0.0 210.0 463.0 0.0 9.0 2.0 471.0 482.0 7.0 3.0 329.0 339.0 1,284.0
Korea 141.4 3.9 0.0 0.0 218.1 363.4 0.0 0.4 0.0 145.9 146.3 11.0 4.2 164.9 180.1 689.8
Pakistan 1,960.9 3.3 0.0 93.3 278.4 2,335.9 490.8 38.1 2.7 86.4 618.0 4.8 4.0 0.0 8.8 2,962.7
Viet Nam 836.0 97.0 0.0 0.0 130.2 1,063.2 259.0 145.0 0.0 102.0 506.0 380.0 9.0 17.0 406.0 1,975.2
Uzbekistan 559.0 0.0 0.0 0.0 0.0 559.0 126.3 0.0 0.0 0.0 126.3 33.0 0.0 0.0 33.0 718.3
Asia total 28,840.1 698.5 788.4 136.6 12,433.9 42,897.5 7,443.7 4,340.0 410.0 3,942.6 16,136.3 4,513.7 435.0 2,365.5 7,314.2 66,348.0
(Europe)
Austria 8.0 3.0 0.0 65.0 42.0 118.0 6.0 1.0 4.0 36.0 47.0 2.0 0.0 41.3 43.3 208.3
Bel-lux 1.0 8.0 0.0 111.0 44.0 164.0 5.0 4.0 5.0 31.0 45.0 28.0 1.0 51.0 80.0 289.0
Belarus 250.0 0.0 0.0 0.0 0.0 250.0 48.0 0.0 0.0 0.0 48.0 450.0 0.0 0.0 450.0 748.0
Bulgaria 4.4 0.0 146.5 0.6 0.5 152.0 0.0 0.0 11.9 0.5 12.4 1.0 0.0 0.4 1.4 165.8
France 237.0 26.0 736.0 238.0 1,042.0 2,279.0 197.0 11.0 108.0 413.0 729.0 396.0 15.0 549.0 960.0 3,968.0
Lithuania 115.0 0.0 0.0 0.0 0.0 115.0 35.0 0.0 0.0 0.0 35.0 44.0 0.0 0.0 44.0 194.0
Netherlands 1.0 3.0 1.0 201.0 78.0 284.0 8.0 0.0 0.0 44.0 52.0 36.0 6.0 24.0 66.0 402.0
Poland 200.6 14.8 399.7 161.1 85.5 861.7 38.3 16.4 23.0 224.8 302.5 165.0 0.0 227.0 392.0 1,556.2
Romania 70.0 0.0 120.0 78.4 0.0 268.4 0.0 0.0 0.0 72.9 72.9 9.0 0.0 5.0 14.0 355.3
Russia 74.9 2.5 675.7 0.0 337.4 1,090.5 112.8 0.0 0.0 221.2 334.0 38.5 1.5 150.0 190.0 1,614.5
Spain 270.3 86.6 98.2 193.0 421.9 1,070.0 216.1 18.0 17.4 349.8 601.3 130.5 23.3 334.5 488.3 2,159.6
UK 114.0 10.0 454.0 26.0 538.0 1,142.0 27.0 0.0 18.0 238.0 283.0 12.0 10.0 354.0 376.0 1,801.0
Ukraine 200.0 100.0 200.0 0.0 0.0 500.0 60.0 0.0 0.0 0.0 60.0 29.0 0.0 0.0 29.0 589.0
Germany 284.6 47.0 0.0 823.0 633.0 1,787.6 107.0 2.0 23.0 195.0 327.0 233.8 0.0 245.8 479.6 2,594.2
Italy 351.2 33.5 157.0 0.0 243.6 785.3 0.0 32.1 29.4 310.5 372.0 63.8 15.4 196.1 275.3 1,432.6
Europe total 2,182.0 334.4 2,988.1 1,897.1 3,465.9 10,867.5 860.2 84.5 239.7 2,136.7 3,321.1 1,638.6 72.2 2,178.1 3,888.9 18,077.5
(Oceania)
Australia 551.0 24.0 12.0 7.0 456.0 1,050.0 529.0 237.0 27.0 284.0 1,077.0 43.0 5.0 182.0 230.0 2,357.0
(America)
Canada 720.8 83.0 66.1 21.0 738.8 1,629.7 605.8 0.0 3.2 28.9 637.9 331.5 4.7 9.8 346.0 2,613.6
Mexico 560.0 265.0 20.5 0.0 331.0 1,176.5 222.0 18.5 2.7 106.8 350.0 120.0 33.0 32.6 185.6 1,712.1
USA 2,211.9 201.0 476.2 0.0 7,989.2 10,878.3 2,116.7 3.0 126.6 1,628.6 3,874.9 2,932.1 76.3 1,536.7 4,545.1 19,298.3
Brazil 990.0 280.4 119.9 21.2 404.5 1,816.0 878.4 659.8 339.7 929.1 2,807.0 2,022.0 21.3 1,015.7 3,059.0 7,682.0
Venezuela 130.0 11.0 1.7 0.0 47.3 190.0 26.0 0.0 0.0 24.0 50.0 25.0 4.0 31.0 60.0 300.0
Chile 171.0 0.0 1.0 14.0 24.0 210.0 72.0 0.0 106.9 0.1 179.0 63.0 3.0 9.0 75.0 464.0
America total 4,783.7 840.4 685.4 56.2 9,534.8 15,900.5 3,920.9 681.3 579.1 2,717.5 7,898.8 5,493.6 142.3 2,634.8 8,270.7 32,070.0
Total 39,023.2 2,087.5 5,321.3 2,456.4 26,661.3 75,549.7 13,429.4 5,499.4 1,459.9 9,646.1 30,034.8 11,737.4 786.0 7,725.5 20,248.9 125,833.4
Share(%) 51.7 2.8 7.0 3.3 35.2 100.0 44.7 18.3 4.9 32.1 100.0 58.0 3.9 38.1 100.0
World Total 85,500.0 33,800.0 23,600.0 142,900.0
Of two tables above, production and consumption of phosphate fertilizers, especially MAP,
TSP and NP with which SCP is associated, in Iraq’s neighbouring countries is shown below.
Trade data is effective to examine competitiveness of each country. Thus, trade of DAP
and MAP in 2005 is also introduced below.
Because this is also true in the case of nitrogen fertilizers (including urea and ammonium
sulphate), the global production and consumption of fertilizers above is also used in its
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discussion later. Trade of urea and ammonia is also introduced as reference.
Table 5.2-7: DAP Import and Export by Country

Di-ammonium phosphate (DAP) Trade : FY 2005
Unit: 1,000 tons
Importers West & East Europe America Asia Others Grand Total
Exporters Germany Spain France Turkey Total Brazil Mexico Canada Total Japan Viet Nam China Pakistan India Total Volume Ratio %
W. & E. Europe
Netherlands 25 25 0 0 25 0.3
Belgium 14 12 21 47 0 47 0.5
Lithuania 70 23 80 158 331 0 78 33 111 441 4.6
Russia 4 64 152 220 9 9 35 273 308 536 5.6
Poland 68 68 0 68 0.7
Ukraine 0 0 33 33 33 0.3
Total 181 35 165 310 691 0 0 9 9 0 0 112 339 451 0 1,151 12.0
Africa & Mid East
Tunisia 97 120 253 470 0 17 96 46 159 629 6.6
Senegal 7 7 0 0 7 0.1
Jordan 0 0 75 25 99 199 199 2.1
Saudi Arabia 0 13 13 0 13 0.1
Morocco 35 124 159 78 78 101 101 338 3.5
Total 0 139 244 253 636 78 0 13 91 75 17 197 71 99 459 0 1,187 12.4
America
USA 52 52 166 406 104 677 289 24 1,549 174 819 2,855 3,584 37.5
Total 0 0 0 52 52 166 406 104 677 289 24 1,549 174 819 2,855 0 3,584 37.5
Asia
China 0 0 6 478 484 484 5.1
Korea 0 0 3 33 36 36 0.4
Philippines 0 0 71 71 71 0.7
Total 0 0 0 0 0 0 0 0 0 9 582 0 0 0 591 0 591 6.2
Oceania
New Zealand 0 0 0 0 0.0
Total 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0.0
Others 2 8 37 47 1 36 37 26 52 30 108 2,861 3,053 31.9
Grand Total 183 182 446 615 1,426 245 406 162 813 373 649 1,746 409 1,287 4,464 2,861 9,565 100.0
Ratio % 1.9 1.9 4.7 6.4 14.9 2.6 4.2 1.7 8.5 3.9 6.8 18.3 4.3 13.5 46.7 29.9 100.0
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Table 5.2-8: MAP Import and Export by Country

Mono-ammonium phosphate (MAP) Trade : 2005
Unit: 1,000 tons
Importers West & East Europe America Asia Australia Others Grand Total
Exporters Germany Spain France Total Brazil Argentina Mexico USA Canada Total China Pakistan India Total Volume Ratio %
W. & E. Europe
Netherlands 9 9 0 0 9 0.1
Belgium 9 6 11 26 5 5 0 31 0.4
Russia 35 17 9 61 397 65 28 489 373 66 440 990 14.3
Kazakhstan 0 0 20 20 20 0.3
Total 53 23 20 95 397 65 0 28 5 495 20 373 66 460 0 0 1,050 15.2
Africa & Mid East
Tunisia 5 5 0 42 42 47 0.7
South Africa 0 16 16 0 57 73 1.1
Jordan 0 0 12 12 12 0.2
Saudi Arabia 0 0 0 0 0.0
Israel 1 5 6 12 8 13 22 16 16 50 0.7
Morocco 30 40 69 300 12 30 342 0 17 428 6.2
Total 1 40 46 86 300 28 38 13 0 379 0 42 28 70 74 0 610 8.8
America
Mexico 0 8 8 0 8 0.1
Canada 0 46 46 0 46 0.7
USA 0 590 268 204 609 1,670 405 405 717 2,792 40.4
Total 0 0 0 0 590 268 204 54 609 1,725 0 405 0 405 717 0 2,846 41.1
Asia
China 0 6 12 19 40 41 81 46 145 2.1
Philippines 0 0 0 11 11 0.2
Total 0 0 0 0 0 0 6 12 0 19 0 40 41 81 57 0 156 2.3
Oceania
New Zealand 0 0 0 0 0.0
Total 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0.0
Others 1 9 5 15 6 14 20 6 1 7 11 2,203 2,255 32.6
Grand Total 54 72 71 197 1,287 361 254 122 614 2,637 20 866 136 1,023 858 2,203 6,918 100.0
Ratio % 0.8 1.0 1.0 2.8 18.6 5.2 3.7 1.8 8.9 38.1 0.3 12.5 2.0 14.8 12.4 31.8 100.0
From the data about phosphate fertilizers and trend of the fertilizers in and around Iraq
(especially production, consumption and trade volumes in neighbouring nations), the following
issues can be pointed out:
Points:
1) Production and export volumes of phosphate fertilizers (MAP, DAP, SSP, TSP, NP, etc.)
Iraq’s neighboring countries (in the Middle East and Africa, etc.) are relatively rich in
phosphate rocks and many of them produce phosphate fertilizers actively (including
Saudi Arabia, Iran, Israel, Jordan, Turkey, Morocco, Egypt and Tunisia).
As clearly shown in DAP and MAP trade data above, they have export competitiveness
of phosphate fertilizers. There is no doubt that they can be very tough competitors if
Iraq wants to export phosphate fertilizers in future. (Morocco, Tunisia, Jordan, Saudi
Arabia, Russia, Lithuania and Israel are strong exporters.) Iraq needs to make careful
preparation in order to compete with them as a supplier in the global market.
Experiences and business strategies of such major Japanese trading houses as Mitsui &
Co., Ltd. are expected to be very useful in making the preparation.
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2) Consumption and import volumes of phosphate fertilizers (including MAP, DAP, SSP,
TSP, NP, etc.)
Many of Iraq’s neighboring countries (in the Middle East and Africa, etc.) actively
produce phosphate fertilizers as mentioned above. However, most of their products
are exported and they are not major agricultural nations.
Biggest consumers of phosphate fertilizers are China, India, the United States, Brazil
and Australia and they are also major importers. Iraq should consider these countries
if they want to export their fertilizers.
As for Iraq, it first needs to satisfy its consumption. As described earlier, only the
Al-Qaim plant is equipped with phosphate fertilizer production facility in Iraq. The
production volume is extremely low, far from satisfying the national demand. Due to
the country’s policy of non-import of fertilizers, it is an urgent need to increase the
production for domestic consumption.
DAP can be more competitive export product than TSP, because, although TSP contains
more phosphorus (P2O5 46%), it is not a compound and the demand for compound
fertilizers that contain phosphorus and nitrogen, specially DAP (N 18%, P2O5 46%), has
grown sharply in the global market. Thus, it is more wise to produce DAP rather than
TSP also in considering the domestic demand.
3) Urea import-export balance
Table 5.2-9: Urea Import and Export Volume by Country

Importers West & East Europe America Asia Egypt & Grand Total
Oceania Others
Exporters France Germany Italy Spain UK Turkey Total USA Brazil Mexico Total India Thailand Pakistan Philippines Total S.Africa Volume Ratio %
W. & E. Europe
Netherlands 140 33 6 28 45 252 31 31 0 2 361 646 2.1
Germany 80 41 18 83 222 0 0 1 1 352 576 1.9
Russia 211 193 249 170 201 28 1,052 35 648 618 1,301 47 33 80 73 1,902 4,408 14.6
Ukraine 33 460 493 292 267 559 614 247 164 1,025 263 1,231 3,571 11.9
Romania 3 161 65 4 273 506 266 266 0 56 0 828 2.7
Total 434 226 490 281 333 761 2,525 332 940 885 2,157 661 0 280 164 1,105 1 3,846 9,634 32.0
Africa & Mid East
Libya 12 12 77 77 0 245 348 682 2.3
Egypt 154 44 35 57 290 201 201 15 38 53 210 754 2.5
Kuwait 0 453 453 17 194 20 231 56 0 740 2.5
Qatar 95 35 130 828 828 152 263 54 159 628 584 790 2,960 9.8
Saudi Arabia 8 8 635 635 290 507 40 127 964 209 270 489 2,575 8.6
Oman 0 0 992 992 0 992 3.3
UAE 0 0 136 136 410 546 1.8
Total 257 0 44 82 57 0 440 2,194 0 0 2,194 1,587 979 132 306 3,004 454 910 2,247 9,249 30.7
America
USA 0 374 374 0 286 660 2.2
Canada 0 1,787 1,787 0 3 1,790 5.9
Trinidad 12 12 462 10 472 0 219 703 2.3
Venezuela 22 52 74 352 167 68 587 0 351 1,012 3.4
Argentina 0 336 336 0 232 568 1.9
Total 34 0 0 0 52 0 86 2,601 503 452 3,556 0 0 0 0 0 0 0 1,091 4,733 15.7
Asia(Total) 25 25 494 494 13 426 119 223 781 0 443 1,734 3,477 11.5
Others(Total) 88 220 287 66 72 64 797 600 30 0 630 0 61 0 0 61 646 887 3,021 10.0
Grand Total 813 446 821 429 539 825 3,873 6,221 1,473 1,337 9,031 2,261 1,466 531 693 4,951 1,100 1,354 9,805 30,114 100.0
Ratio % 2.7 1.5 2.7 1.4 1.8 2.7 12.9 20.7 4.9 4.4 30.0 7.5 4.9 1.8 2.3 16.4 3.7 4.5 32.6 100.0
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Table 5.2-10: Ammonia Import and Export Volume by Country

Unit: 1,000 tons NH3
Importers West & East Europe America Asia Grand Total
Others
Exporters France Germany Bergium Spain Norway Sweden Turkey Total USA Brazil Total India Korea Taiwan Total Volume Ratio %
W. & E. Europe
Netherlands 134 64 121 125 444 0 0 313 757 4.0
Germany 6 91 35 132 0 0 216 348 1.8
UK 89 29 51 23 192 0 17 209 1.1
Russia 348 51 351 79 113 2 135 1,079 1,189 1,189 52 100 152 988 3,408 17.9
Ukraine 95 18 21 20 38 348 540 825 825 77 72 149 314 1,828 9.6
Poland 7 7 0 0 303 310 1.6
Total 348 369 462 157 375 200 483 2,394 2,014 0 2,014 129 172 0 301 2,151 6,860 36.0
Africa & Mid East
Algeria 107 10 31 221 369 10 10 0 227 606 3.2
Iran 0 0 189 189 29 218 1.1
Qatar 0 30 30 301 23 324 108 462 2.4
Saudi Arabia 0 25 25 326 40 366 34 425 2.2
Total 0 107 10 31 0 221 0 369 65 0 65 816 63 0 879 398 1,711 9.0
America
USA 0 0 547 547 94 641 3.4
Canada 0 1,338 1,338 0 0 1,338 7.0
Trinidad 35 26 61 4,213 238 4,451 0 155 4,667 24.5
Venezuela 0 149 17 166 0 86 252 1.3
Total 0 0 35 0 26 0 0 61 5,700 255 5,955 0 547 0 547 335 6,898 36.2
Asia(Total) 0 44 44 390 285 548 1,223 860 2,127 11.2
Others(Total) 16 221 19 28 11 155 1 451 156 0 156 364 1 0 365 470 1,442 7.6
Grand Total 364 697 526 216 412 576 484 3,275 7,979 255 8,234 1,699 1,068 548 3,315 4,214 19,038 100.0
Ratio (%) 1.9 3.7 2.8 1.1 2.2 3.0 2.5 17.2 41.9 1.3 43.2 8.9 5.6 2.9 17.4 22.1 100.0
5.2.4 Fertilizer Prices and Related Government Subsidies in Iraq
Iraq used to have government subsidy programs for fertilizers and other agricultural
products. In the case of fertilizers, the government (Ministry of Agriculture) used to purchase
fertilizers from SCP and other producers at a relatively high price and sell them to farmers at a
lower price.
Iraq Government was able to carry out such subsidy programs because it had an enormous
amount of revenues from crude oil exportation and the former regime tried to gain popularity
among farmers by having such programs.
However, it is also true that such subsidy programs had distorted sound product prices and
supply-demand that are usually determined in free market economy. Gradual abolishment of
such programs has been voiced recently in order to eliminate such negative impact.
It is not clear in which process the prices for domestic market and exportation are used in
the commercial distribution. Although Stud Team have asked the Iraqi side about the subsidy
program to solve the problem, Stud Team have yet to receive a response.
In such a condition, Stud Team have collected following information on subsidies for
agricultural products based on various sources:
i) According to National Development Strategy issued in 2007 by Iraqi Ministry of

Planning and Development Cooperation
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The Government of Iraq has begun taking action to liberalize prices of fertilizers,
pesticides, wheat, barley and rice. The Ministry of Economy and Trade intends to
purchase wheat and rice from farmers at an international price. This is expected to
promote agricultural production.
The Government of Iraq is trying to improve its agricultural policy and related
programs in order to secure food for a mid-term. More specifically, it intends to
expand private agricultural sector, gradually abolish government subsidies, improve
water resources management and implement full-scale measures for agricultural
recovery.
ii) According to TEC data in 2006
Urea supply-demand balance in 2005 was as follows:

Domestic urea fertilizer demand (for grains; vegetables excluded) 850,000 tons
Domestic urea production 284,893 tons
(Basra 226,744 tons, Baiji 58,149 tons)
Urea exportation and importation 0
This shows that the domestic production satisfies only about 33% percent of demand.
In a normal situation, the shortage is compensated by imports. However, international
economic sanctions were imposed on Iraq (1990-2003), which restricted oil exportation
and caused a shortage of foreign currencies. This put the country into a situation
where it could not import goods during the period. As a result, it used only an
absolutely small amount of domestically produced fertilizers.
Another reason why the Government of Iraq has taken the policy is to protect farmers.
The Ministry of Agriculture provides subsidies for both domestically produced and
imported urea to maintain a low domestic price. In such a condition, it is unrealistic
for private companies to import urea.
The international price for urea fertilizers per ton is around 320 U.S. dollars including
250 U.S. dollars for the fertilizers themselves and 70 U.S. dollars for transportation.
Iraqi Ministry of Agriculture purchases 1 ton at 215,000 Iraqi dinars (150 USD at the
rate of 1 USD = approximately 1,430 Iraqi dinars) from SCF and sells it to farmers for
175,000 Iraqi dinars (or approximately 120 U.S. dollars).
As long as such a huge price gap (between international and domestic prices) exists, it is
unrealistic for private companies to import urea as business. This has made
importation of urea difficult even without any legal restrictions.
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3) According to SCP data
Urea prices before 2003 were as follows:
Urea was sold to farmers at less than 37,000 Iraqi dinars (approx. 20 USD) per ton via
the Ministry of Agriculture and to the public sector at less than 65,000 Iraqi dinars
(approx. 35 USD) also via the ministry.
After the Iraqi War in 2003, urea prices fluctuated tied to the international prices. The
price per ton was 165,000 Iraqi dinars (approx. 135 USD) in 2004 and 500,000 Iraqi
dinars (approx. 400 USD) in 2008.
The data i), ii) and iii) introduced above does not give any consistent satisfying
explanation about fertilizer prices in Iraq and thus Stud Team would like to summarize
our idea based on data from the Iraqi side in future.
5.2.5 Iraqi Trade Balance
As described above, the Government of Iraq was able to provide subsidies because it had a
large amount of trade surplus for crude oil exportation. However, as also described earlier,
international economic sanctions imposed on Iraq mainly in the 1990s restricted oil exportation
and caused discrepancy to trade balance. As a result, it was put into a situation where it is not
capable of importing a variety of necessary goods for a long time.
For reference, Iraqi trade structure is introduced briefly.
＊ Iraq originally exported crude oil and refined petroleum products and imported
industrial goods.
＊ In 1986 (during the Iran-Iraq War), infrastructure of oil mining to transportation was
destroyed, which caused a sharp decline of crude oil exportation to post 1.2 billion
dollars of trade deficit.
＊ After the war ended in 1988, crude oil exportation gradually recovered thanks to the
construction of new pipelines and restoration of damaged facilities.
＊ However, Iraqi invasion of Kuwait in August 1990 led the international community to
impose economic sanctions on Iraq during the 1990s. As part of the sanctions, the
UN heavily restricted crude oil exportation. It was allowed to export crude oil only
for the acquisition of such humanitarian goods as food and pharmaceuticals.
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＊ The implementation of UN Oil for Food Program in December 1996 led to the
beginning of the improvement of Iraqi economy. In December 1999, The UN
Security Council permitted Iraq to export crude oil to satisfy the humanitarian demand
under the exchange program. The crude oil exportation has increased to 75% of the
level before the Iran-Iraq War.
＊ As of 2003, oil-related export values accounted for 91.9 percent of all exports and
import values of industrial goods accounted for 93.1% of all imports. Both export and
import values were 10.1 billion dollars each.
5.3 Chemical Fertilizer Demand Forecast in Iraq
5.3.1 Agriculture Sector and Agricultural Policy in Iraq
According to the National Development Strategy the Government of Iraq announced in

March 2007, the agricultural sector and agricultural policy are as follows. Although it is a
little long quotation, it is introduced here because it is an important issue. Some specific
themes are quotes from document of Water Forum.
Although the agricultural sector does not account for a large portion of all industries in Iraq, it
is still an important component. However, it has to depend on a large volume of food import
to satisfy the domestic food demand, because of a rapid population increase for the last 30 years,
limited arable land, and low productivity of the agricultural sector in general.
In the 1980s, for example, Iraq had to depend 50 percent of necessary food on imports. 69%
and 48% of domestic consumption of grains and poultry were needed to be imported,
respectively. In 2002, about 90% to 100% of many of important food items, including wheat,
rice, sugar, vegetable oil and meats, were imported. After Gulf War III in 2003, the stagnation
even accelerated and it will not be able to satisfy its food demand without importation for the
foreseeable future. It is also true that for some time in the future it will have no other choice
but to depend on food aid from other organizations.
1) Iraq’s land area is 43.7 million hectares (hereinafter million hectare is used as the unit) and it
can be categorized as in the following:
Non-arable land 34.2 (78%)
Arable land 9.5 (22%)
About 3.5 million hectares to 4.0 million hectares is estimated to be actually used for
cultivation.
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About 50% of the arable land has very low productivity, barely good enough as
pastureland for such livestock animals as goats and sheep in summer.
According to FAO document, other countries (Iraq’s neighboring countries and other
major countries) have following sizes of arable land. (Figures are those obtained in 1994
and expressed in million hectares.)
(Iraq’s neighboring countries)

Egypt: 3.5 Libya: 2.1
Iran: 18.1 Morocco: 9.3
Jordan: 0.4 Oman: 0.06
Syria: 5.5 Qatar: 0.008
Saudi Arabia: 3.8 Tunisia: 4.9
Kuwait: 0.005 Iraq: 5.7
Lebanon: 0.3
(Other major countries)

Japan: 37.2 France: 19.5
India 169.7 Germany: 12.0
China: 95.8 Italy: 11.1
US: 187.8 Spain: 20.1
Brazil: 50.7 UK: 5.9
Major crops in Iraq are date, wheat, barley, corn, rice, cotton and various fruits. Date,
grape and olive are cultivated on a total area of approximately 0.34 million hectares.
Although the size of cultivated land of grains, legumes, fruits and vegetables differ every
year because of climate and market conditions, it is reasonable to say that 3.5 million to 4
million hectares of land is cultivated. Land for wheat and barley accounts for 75% to 85%
of land for all grains.
2) Cultivated land in Iraq is largely divided into rainwater-dependent grain production area in
the northern part and irrigated farmland where grains, fruits and vegetables are grown in the
central to southern part. According to data of the UN Food and Agriculture Organization,
there was 2.55 million hectares of irrigated farmland in 1989.
The following description is found in Water Forum document:

A total of 5.5 million hectares of land was irrigable in 1990 — 63% around the Tigris, 35%
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around the Euphrates, and 2% around the Shatt al-Arab waterway.

Soil condition is generally good. When the water level rises, flood irrigation (planting
takes place when flood covers irrigated area with water and overflow of surface water goes
into the headrace and earth-fill dam) was once conducted. Development of reservoirs in
irrigable areas also helped a gradual increase of irrigable land from 4.25 million hectares in
1976. However, irrigation development still depends on the river water volume that is
eventually natural phenomena and thus it is unstable.
By 1990, area size where irrigation water is managed increased to about 3.2 million hectares.
This comprises of 0.1 million hectare (3%) around the Shatt al-Arab waterway, 2.2 million
hectares (67%) around the Tigris, and 1 million hectares around the Euphrates (30%). This
means that a total of 3.305 million hectares is irrigated by surface water. However, in
reality, most of irrigation facility cannot be used due to salt damage and flood damage. As
of 1993, irrigation facility that was actually functioning covered only 1.93 million hectares
of areas.
3) The former regime struggled to manage the private agricultural sector and agricultural
investment from 1979 to 1990. Although revenues from oil grew rapidly, the government
wasted them for purchasing techniques from Europe and the United States and as an
enormous amount of subsidies for the private agricultural sector. After Gulf War III, Iraq
was divided into two regions — three northern governorates centering around Erbil and the
remaining 15 governorates. The former regime launched various programs for the 15
governorates for domestic food production increase and food management after international
economic sanctions by the UN and other organizations. They include monopolistic
management of major grain production by the government and rationing of major food items
under the national government control.
4) Due to various governmental stimulus packages and rise of domestic food prices, Iraqi
farmers tried to cultivate hillsides with very low productivity for planting. As a result,
cultivated land increased in 1992 and 1993. However, productivity did not improve
because of shortages of fertilizers, farming tools and pesticides. The irrigation
infrastructure was not rehabilitated and most of irrigation facility in the central to Southern
part of the country is becoming old.
5) Restoration of public safety is of urgent need in order to recover the domestic grain
production. Political stability and restoration of public safety is the key to bringing
investment into the agricultural sector for its growth.
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6) Rehabilitation of irrigation facility (long-term desalination project plan) and establishment

of grain distribution infrastructure, which includes shipping and storage facility and
distribution system for agricultural products, are of great importance.
7) Iraq heavily depends on international food aid. According to an estimate, the country
needs more than 2 million tons of food, or food that worth 1.7 billion dollars, for the next
six months, which is the biggest in the 40-year history of aid programs. According to the
estimate, 16 million Iraqis (more than two-thirds of the national population) have no other
choice but to depend on the food aid.
8) What is of most urgent need for the recovery of Iraq’s agricultural sector is supply of
quality seeds. Farmers need several thousand tons of high quality seeds mainly of wheat,
rice, barley and root and other vegetables as well as pasture grass seeds to improve
degraded pastureland as early as next year.
9) Iraq was capable of supplying major grains by itself until the end of the 1970s. However,
it now needs to import necessary food items. The required amount of food is increasing
because of a population increase at the rate of 3% per annum, which is about twice as high
as that of India and China.
10) Handling of salt damage is a serious issue. About 75% of irrigated cultivated land suffers
the damage as a result of improper water management. There is an urgent need to review
the irrigation facility management method and adopt crops resistant to salt damage from
international hybrid management organizations and gene development organizations.
Water Forum provides the following explanation:
Salt damage to soil is a serious issue in the region and a decrease in crop yield was reported
due to salt damage to soil 3,800 years ago. In 1970, half of irrigated area in the central
and southern Iraq became infertile due to salt and flood damage. A lack of drainage and
irrigation techniques is a major cause of the problem. In 1978, a land revival program that
includes the development of irrigation canals and drainage and water collection facilities
was carried out.
In recent years, 4% of irrigated area is rapidly contaminated by salt to the level of 20% to
50% salt concentration. (74% of irrigated area has some kind of contamination by salt)
The Irrigation Agency of the former regime announced that salt that was carried to the
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Persian Gulf via the Saddam River was 17 million tons in 1995. Water with high salt
concentration (1,500ppm or over) has been used for irrigation to grow dates since 1997.
The salt-containing groundwater is used to grow tomatoes in the southern area.
As for the crop yield per hectare of cultivated land, an average of 2.7 tons and 1.7 tons of
wheat was produced in irrigated production and in rainwater production, respectively, in
1991. The yield of barley was an average of 1.8 tons per hectare in irrigation production
and 1.3 tons in rainwater production.
11) The Government of Iraq began to take action to liberalize the prices of fertilizers, pesticides,
wheat, barley and rice. The Ministry of Economy and Trade intends to purchase wheat and
rice from Iraqi farmers at international prices. This is expected to promote agricultural
production.
The government also intends to improve agricultural policy and related programs in order to
secure food on a mid-term basis. More specifically, it intends to expand private
agricultural sector, gradually abolish government subsidies, improve water resources
management and implement full-scale measures for agricultural recovery.
5.3.2 Current Conditions and Challenges of Water Resources in Iraq
An overview of Iraqi water resources, essential for agriculture, is provided below.

Descriptions in this chapter are based on Water Forum, the United Nations Environment
Program, “International Water Conflicts—Data Analysis by River System and Resolutions”
published by the UN Press, and various data compiled by the Government of Iraq.
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Water Flow Control of the Tigris and the Euphrates
(1) Geography of Iraq
- Alluvial plains formed by the Tigris and the Euphrates that originate in eastern Turley
accounts for approximately 30 percent of national land.
- The mountainous area consisting of the northern area of the Tigris, the upstream of the
Lesser Zab that is a tributary of the Tigris, and areas around The Zagros Mountains (near
the border of Iran) located northeast of the Lesser Zab upstream accounts for
approximately 20 percent of national land and its peak is at 3,550 meters above sea level.
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- The western desert between Syria and Saudi Arabia accounts for approximately 40
percent of national land.
- The Tigris and the Euphrates forms a very flat area in the south of Baghdad. (Baghdad
is 34 meters above sea level.) The extensive area encircled by Nasiriyah, Amarah and
Qurna forms a lake and wetland district. The Shatt al-Arab River is formed by the
confluence of the two rivers in Qurna and discharges into the Persian Gulf.
(2) Rivers Basins
- The annual average flow of the Euphrates River is estimated to be 30km3. However, it
3 3
fluctuates significantly within the range of 10km to 40km . Unlike the Tigris, the
3
Euphrates has no tributary in Iraq. A total of 10km flows into Lake Al-Hammar
annually. The Tigris has the average annual flow of 21.2km3 and its tributaries are all on
the left-side bank.
- Greater Zab River: It originates in Turkey and the flow is controlled by Bakhma Dam.
The flow at the confluence with the Tigris is about 13km3. The flow in Iraq is
3
25,810km that accounts for 62% of all flows.
- Lesser Zab River: It originates in Iran and the flow is controlled by Dokan Dam. The
2 3
river basin has a total area of 21,475km . Although the flow used to be 7.17km , it
3
decreased to 5.07km after the construction of the dam.
- The Al-Adhaim Rivers basin has a total area of 13,000km2 and the water flow is 0.79km3.
It merges with the Tigris. It is not permanent and appears during floods.
- The Diyala River basin has a total area of 31,896km2, 75% of which is in Iraq. The flow
is controlled by Darbandikhan Dam and the flow at the confluence with the Tigris is
5.74km3.
- The Nahr atTib River, the Dowarege River and the Shehabi River originate in Iran with a
total river basin of 8,000km2. The water is reported to contain a high level of salt.
- The Al-Karkha River basin has a total area of 46,000km2, mainly in Iran. A total of
3 2
6.3km of water flows into Iraq from a water catchment area of 46,000km annually. It
flows into the Hawr Al Hawiza when the water level rises and into the Tigris in the dry
season.
- The Karun River originates in Iran and approximately 24.7km3 flows into the Shatt
al-Arab River annually. The Karun River brings a large volume of freshwater into the
flow of the Shatt al-Arab River before it discharges into the sea.
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- The Euphrates and the Tigris often cause serious damage when they are flooded. The
water level of the Tigris sometimes increases at the speed of 30 centimeters per hour. A
flood affects an extensive area in the southern region, in particular, regularly and the river
bank is destroyed every time when such a serious flood occurs. Thus, a tall
embankment is needed along the surrounding villages and roads. The Tharthar reservoir
was built to control the rise of water flow at the Samarra Dam in order to protect Baghdad
from the flood of the Tigris that occurred frequently in the 1950s.
(3) International Freshwater Agreements and Water Conflicts
More than 90 percent of the water flow in the Euphrates River in Iraq comes from
neighbouring countries including Turkey and Syria and thus Iraq needs to have negotiations
with these countries to control the flow. The concerned three counties (Turkey, Syria and Iraq)
have had such negotiations to coordinate their interests. However, it is very difficult to come
up with coordination that satisfies all the concerned nations, and no international agreement on
the water issue of the Euphrates River has been concluded among the three nations.
Just as reference, major water conflicts over the Euphrates River in the past are introduced
below.
• A conflict gradually emerged over water distribution among Iraq, Syria and Turkey in
the middle of the 1960s. Although bilateral and tripartite negotiations were conducted
among the three countries several times to find solutions, they have yet to reach any
specific agreement.
• Beginning of water intake from two dams (Keban Dam in Turkey and Tabqa Dam in
Syria) in 1973 caused a decrease in flow into Iraq, which is believed to have triggered a
conflict.
• In 1974, Iraq and Syria negotiated to agree on the water discharge from Tabqa Dam to
be increased to 200 million cubic meters annually.
• However, in the following year in 1975, Iraq claimed in protest that Syria had not
satisfied the amount agreed in the negotiations. They agreed that Saudi Arabia would
serves as a mediator between the two parties. Although details of the agreement are
not disclosed, Syria and Iraq take 40 percent and 60 percent of the water flow of the
river, respectively, according to some sources.
• However, later, the Southeastern Anatolia Project (GAP) formulated in Turkey was
launched, which made an early settlement of the water distribution issue a must.
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• In 1980, a joint technical committee to discuss water resources between Turkey and
Iraq was formed, which was joined by Syria in 1983. However, they have not yielded
any specific result.
• In 1986, a ministerial meeting was held among the three countries, which did not yield
any specific result, either.
• In 1990, Ataturk Dam that is the biggest in the GAP began water storage. Because it
suspended the flow of the Euphrates River for 30 days, tripartite meetings resumed.
However, the talks were discontinued due to the outbreak of the Gulf War.
• In September 1992, ministers of the three nations met in Damascus. Turkey did not
agree on Iraqi request to increase water flow and the negotiations broke down. Since
then, no significant progress has been made.
(4) Groundwater
Good quality groundwater has been found in areas on the right bank of the Euphrates River
and in the hills in the northeast of the country.
In north-eastern Iraq, the water runs at the depth of 5 to 10 meters below ground with the
flow of around 10 to 40 m3/s. The water vein flows toward the south-eastern region and salt
concentration increases gradually up to 1 mg/l.
The aquifer on the right bank of the Euphrates river is found at the depth of 300 meters
below ground with the water flow of 13 m3/s. Salt concentration is reported to be 0.3 to 0.5
mg/l.
(5) Dam
As of 1997, 32 dams were in operation, eight were under construction and 13 were under
planning in the Tigris and Euphrates river system. Reservoir capacity of all dams in the Tigris
3
river system totalled 13.7 km in 1977. Several dams were built in Iraq in the 1980s. They
include Saddam Dam (11.1 km ) on the Tigris River, multipurpose Qadisiyah Dam (8.2 km3) on
3
the Euphrates River, Bekhme Dam on the upper stream of the Great Zab (tributary of the Tigris)
(17.1 km3), Badush Dam (0.5 km3) on the Tigris and some other dams in the desert (total flow
of 0.5 km3).
The construction of the dams increased the reservoir capacity of the Tigris River and the
Euphrates River to 42 km3 and 8.2 km3, respectively, totalling 50.2 km3. However, Bekhme
Dam has been completely destroyed. As of 1997, Al-Adom Dam on the Tigris, with a capacity
of 3.8 km3, was under construction.
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The construction of Tharthar Dam (85 km3) in the Tigris river basin created two reservoirs
that have stored the Wadi Tharthar waters, and, since 1985, Euphrates waters. Habbaniya Dam
3
(3.3 km ) stores waters in the Euphrates upstream and drains into the Euphrates downstream.
(6) New Water Resources
A new waterway (Saddam River) was constructed in the southern part of the country in
order to increase water transport efficiency, minimize water loss and improve water quality.
The Saddam River (or Third River) collects drainage water from more than 1.5 million hectares
of farmland spreading from north of Baghdad to the Persian Gulf. The waterway construction
was completed in December 1992 with a total length of 565 km and with a total discharge of
210 m³/s. Other waterways were also constructed for reclamation of farmland, etc.
It is reported that, in 1990, water consumption in Iraq totalled approximately 42.8 km3, 92%
for agriculture, 3% for domestic use and the remaining 5% for industrial use. According to a
recent survey, 85% of river water is used for agriculture.
(7) Major Challenges
y Responsive measures to decreasing water intake due to the impact of dams on the
upstream of the Tigris and the Euphrates
y Drainage management in wetlands
y Solution to contamination of surface water caused by sewerage and garbage
y Restoration and good management of water supply network destroyed by wars
y Effective management of irrigation system to stop rising salt concentration
y Prevention of groundwater contamination caused by oil leakages
y About 5 million Iraqis (19% of the population) have no access to safe water and
sanitary facility. Solution to the problem.
y Recent frequent suspension of operation of water and sewerage facilities is said to be

caused by insufficient power supply system. Solution to the problem.
y Although 100% of city dwellers had access to safe water, only 55% of Iraqis in other
areas had the access in 1991. This is because Iraq was not able to import chlorine
necessary for water treatment as a result of the international economic sanctions after
the Gulf War. Solution to the problem.
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5.3.3 Chemical Fertilizer Demand Forecast in Iraq
It is not easy to forecast future demand of fertilizers accurately because there are a number
of factors, which include future population increase/decrease, improvement of living standard,
increase/decrease of arable land area, increase/decrease of fertilizer application per unit of
arable land, crops, and fertilizer trade policy.
The factors listed below are used to forecast future chemical fertilizer demand in Iraq.
(1) Conditions
1) Population (unit: thousand people)
2000: 24,080
2002: 27,960
2012: 33,700 (2.7% of estimated annual increase)
2020: 41,700 (2.7% of estimated annual increase, about 50% increase from 2005)
2) Arable land (unit: million hectare)
The figures are not official but the following estimates are available. According to data of
the Government of Iraq in 2007:
① Currently cultivated land: approx. 3.5 to 4.0
② Estimated maximum arable land: approx. 9.5
However, about 50% of the estimated maximum arable land has very low productivity,
barely good enough as pastureland for such livestock animals as goats and sheep in summer,
according to the governmental document. Thus, an optimistic estimate of land areas that
would be actually cultivated for crops and where fertilizers would be applied is around 70%
of the estimated maximum (6.65 million hectares, which is about 50 percent more than 4.0
million hectares that are currently cultivated. This corresponds to the 50% population
increase in 2020 from 2005 mentioned above).
3) Types of fertilizer used in Iraq
As described in Sections 6.2.1 “Production Trend” and 6.2.2 “Trend of Urea Demand in
Iraq”, nitrogen fertilizers account for an extremely large portion. Most of ammonia is
consumed for urea production and about 8% is estimated to be transported to Al-Qaim for
phosphate fertilizers (FY 2009).
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Thus, chemical fertilizer demand forecast in Iraq is discussed based on urea demand
forecast. .
4) Urea demand in Iraq
As also mentioned repeatedly earlier, supply-demand balance has not been led by market
mechanisms recently in Iraq. There is no structure in which producers manufacture the
necessary amount to satisfy actual consumer demand.
In fact, the total design capacity of two urea production plants in Iraq (Khur Al-Zubair
plant in Basra and Baiji plant) is 1,633,500 tons. In 2002, approximately 989,000 tons were
produced and 739,000 tons were consumed domestically. However, since 2003, both the
production and consumption volumes have been low at around 300,000 to 400,000 tons.
Thus, the figures after 2003 are not used for reference as normal conditions.
Usually, importation covers the gap. However, the Government of Iraq has had a policy
to hinder fertilizer imports by providing subsidies for fertilizers. The shortage of
agricultural produce has been imported and provided by other countries’ food aid.
The most recent year when the supply-demand was somewhat reasonable was 2002.
Thus, approximately 989,000 tons of the domestic production and 739,000 tons of domestic
demand after the exported volume is subtracted are used in the calculation below.
5) Grain self-sufficiency rate in Iraq
According to data of the Government of Iraq, grain self-sufficiency rate in 2002 was 33%
and the remaining 67% was satisfied by importation and food aid from overseas. As
described earlier, because fertilizer consumption has decreased since 2003, the rate is
estimated to have also fallen. However, no specific figures are available.
6) Urea fertilizer application in volume per hectare of cultivated land in Iraq
As described in 2) and 4) above, about 4,000,000 hectares are cultivated in Iraq and
739,000 tons of urea was consumed in 2002.
Thus, urea fertilizers applied to per hectare of cultivated land in Iraq were 185 kg
(739,000 tons/4,000,000 hectares) in 2002.
7) Urea fertilizer usually necessary per hectare of cultivated land
About 200 to 250 kg of urea is applied per hectare.
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(2) Estimated Urea Fertilizer Demand in Iraq
Fertilizer demand in Iraq is estimated based on the conditions above.
1) When urea applied per hectare of cultivated land is increased from the current 185 kg to
250 kg to meet the demand increase caused by population increase, with no increase of
arable land (4,000,000 hectares):
4,000,000 ha x 250 kg = 1,000,000 tons
2) When arable land is increased from the current 4,000,000 hectares to the maximum of
9,500,000 hectares or 6,650,000 hectares (about 50% increase from the current level) and
urea applied per hectare of cultivated land remains at the current level of 185 kg or is
increased to 250 kg to meet the demand increase caused by population increase (50%
increase from 2005 to 2020):
① 9,500,000 ha x 185 kg = 1,757,500 tons

② 9,500,000 ha x 250 kg = 2,375,000 tons
③ 6,650,000 ha x 185 kg = 1,230,250 tons
④ 6,650,000 ha x 250 kg = 1,662,500 tons
3) When grain self-sufficiency rate is raised from the current 33% to 60% in 2020:
When the grain self-sufficiency rate is 33%, 9,226,000 people of the population of
27,960,000 in Iraq in 2002 were covered by domestically grown grains, which means that
0.43 hectare of cultivated land is necessary to produce grains per person (4,000,000
hectares/9,226,000 persons, 185 kg of urea application/ha).
When the cultivated land areas are increased to raise the self-sufficiency to 60% in
2020 under the same conditions, 10,758,000 hectares (41,700,000 persons x 60% x 0.43
ha/person) of cultivated land is needed.
In this case, necessary urea at the current application level is 1,990,200 tons
(10,758,000 ha x 185 kg/ha).
However, it is difficult to increase cultivated land to 10,758,000 hectares (it is
estimated to be 9,500,000 hectares at maximum) and thus the fertilizer application per
hectare will be increased to achieve the 60% self-sufficiency rate.
When the urea fertilizer application is increased from the current 185 kg per hectare to
250 kg per hectare, 7,960,000 hectares (1,990,200 tons/0.250) will enable the 60%
self-sufficiency rate. This size may be feasible.
In other words, when 250 kg of urea is applied per hectare to a total of 7,960,000
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hectares to raise the grain self-sufficiency rate to 60% in 2020, a total of 1,990,200 tons of
urea is needed. These figures seem achievable.
Urea fertilizer demand is estimated based on the six scenarios above. It is of course
important to consider the population increase and development of arable land. However,
what is of most importance is what policy the Government of Iraq has and what is done to
achieve the policy.
Iraq has a big potential with crude oil reserves estimated to be the second biggest in the
world. However, as described in Section 6.3.1. 8) in this report, it has gone through
extreme confusion and its grain self-efficiency rate is low and it heavily depends on
international food aid.
The government has the responsibility to bring the nation out of such conditions soon
and raise the rate from the current 33% to 60% at least to minimize foreign food aid.
To achieve it, the government should aim to achieve the last scenario as its policy —
increase of arable land from the current about 4,000,000 hectares to 7,960,000 hectares by
2020 and fertilizer application from the current 185 kg/ha to 250 kg/ha. This requires
1,990,200 tons of urea.
(If SCP plans 1,500,000 tons of annual urea production, the capacity of the three
plants totals 3,133,500 tons, which exceeds the target demand volume of 1,990,200 tons by
as much as 1,143,300 tons.)
If this happens, the competition between the other two urea plants (total capacity of
1,633,500 tons) will become a problem. The two plants are:
① Khur Al-Zubair plant in Basra: 1,056,00 tons of annual design capacity of

urea production
② Baiji plant: 577,500 tons of annual design capacity of urea production
＊ However, actual production of the two plants has fallen drastically for various
reasons. The production capacity of the Basra plant has been around 300,000
tons since 2003 and that of the Baiji plant was below 100,000 tons from 2003 to
2006 and has been zero since 2007. The two plants are making efforts to
recover their capacity and their outcome may change the overall supply-demand
balance. In any case, if SCP plans 1,500,000 tons of annual urea production,
quite a large volume of excessive supply will be unavoidable.
If the supply exceeds the demand, the following measures can be taken:
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① SCP should be given priority as a domestic supplier as a policy. Basra and Baiji
plants began operation as ammonia and urea production plants earlier than their
counterparts in Iraq, because they have good access to the raw materials of natural
gas and they are conveniently located near ports and river ports for transportation.
② The Al-Qaim plant of SCP had no access to gas sources and is located in the
westernmost area of the country with bad access to water and land transportation.
Thus, it was not considered as a large plant to produce ammonia and urea. It was
constructed as a plant to produce a reasonable amount of phosphate fertilizers
because it was happened to be located near phosphate rocks in Akashat.
However, as explained earlier, their operation has been stagnant due to facility
damage caused by wars and problems of gas and ammonia supply.
However, very recently, a promising gas field was found in Al-Qaim, which is believed to
enable a large-scale ammonia and urea production. More importantly, new construction of the
ammonia and urea plant is expected to help correct the regional industrial gap in Iraq.
Although Al-Anbar is a large governorate in size, it is developed less than other areas in Iraq
because the soil is not suitable for farming due to desert that covers the majority of the area, it is
remote from the central area with inconvenient transportation systems, and there were no other
major resources.
Thus, it is important to make a policy to construct a new large-scale ammonia and urea
production plant in Al-Qaim and give priority to their products to supply the domestic market
before the products produced at Basra and Baiji plants. In order to realize this, various means
of transportation need to be developed to ensure shipment to major farming areas in Iraq and
develop product storage and shipment facilities as a national policy.
Various considerations should be given to both Basra and Baiji plants to serve as plants for
domestic market next to the Al-Qaim plant. More importantly, there should be a policy to
support them establish their status as strong exporters taking advantage of their convenient
water transportation. To achieve this, the government has an important role to play, which
includes renovation of major ports and harbors, assurance of the function of gas supply
pipelines and improvement of power infrastructure. It is important for the government to take
a leadership role to enable the three companies in Iraq to exist and prosper together. This role
can be fulfilled only by the government.
However, the most urgent challenge the government needs to tackle in order to implement
them is the early recovery from public confusion caused by political, religious and social
conflicts.
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5.4 Supply Mechanism of Raw Materials of Chemical Fertilizer Industry in Iraq
As for main raw material supply mechanism, it is basically mentioned in chapter 5.2.1.
Therefore, it will be helpful to add the following issues to make clear the total situation again.
Plant No. 4: Operation of the Baiji plant in northern Iraq dropped sharply in 2003 (67.7%
in 2002 to 16.2% in 2003) and to zero in 2007. This is mainly caused by the shortage of raw
materials of natural gas supply due to frequent damage to the gas pipeline. It was not able to
obtain natural gas for 8 to 9 months in 2005. There is also a problem of power supply. The
combination of these factors has led to the zero production since 2007.
The current railway system to transport raw materials of phosphate rocks from Akashat to
Al-Qaim consists of one diesel locomotive and 10 freight cars. Although it is sufficient at the
current operation level (a little over 20%), more freight cars will be needed when the operation
rate improves.
Supply source of ammonia at Al-Qaim plant:
No ammonia is produced at the Al-Qaim plant because the facility is damaged and
deteriorated and thus ammonia is supplied from the fertilizer plants in Baiji and Basra.
However, it raises the cost and the supply system is unstable. Recently, an abundant volume of
natural gas was found in the Akaz field in Al-Qaim. The Al-Qaim plant is expected to produce
ammonia with the gas as raw materials. Ammonia necessary for the production of phosphate
fertilizers is only 50,000 tons a year. There is an idea to build a large-scale ammonia
production facility — with an annual capacity of 1 million, for example — to produce a large
volume of urea with a huge surplus after the consumption for phosphate fertilizer production
and sell it to domestic and overseas market.
Although it is a very attractive scenario for concerned parties of Al-Qaim, it is also a

difficult issue because some of such problems need to be solved: competition with domestic
urea producers of Basra and Baiji plants, and whether new construction of ammonia and urea
production facility in Al-Qaim is a suitable project as Japan’s ODA. Thus, more discussions
are needed.
Although the Al-Qaim plant currently produces only NP that contains nitrogen and
phosphate among compound fertilizers. It may need potassium in some cases. If this
happens, potassium can be imported from neighbouring Jordan that produces the chemical
abundantly.
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Chapter 6
State Company for Phosphate and
Al-Qaim Chemical Complex

Chapter 6 State Company for Phosphate and Al-Qaim Chemical

Complex
6.1 Overview of State Company for Phosphate
In the previous chapters the Study Team discussed the overview of the Ministry of Industry
and Minerals of Iraq, and that of the mining and manufacturing sector in the Mid-Western Iraq
including Al-Anbar, Najaf and Karbala Governorates. Especially focusing on the chemical
fertilizer industry, which the most important industry to the Mid-Western Iraq, Study Team
mentioned both domestic and international market trends. In this chapter Study Team will
discuss the overview of the State Company for Phosphate (hereinafter referred to as SCP),
which manages this industry that is extremely important to the region.
6.1.1 Current Status of SCP
SCP is a state-owned company that was established in 1976 with a capital of 350 million
Iraqi dinars (approx. 28 million yen at the current exchange rate). It has been managing
phosphate rock in Akashat and a phosphate fertilizer complex in Al-Qaim. The company’s
products (including intermediate products) are sulfuric acid, phosphoric acid, and phosphate
fertilizers such as TSP (Tripe Super Phosphate) and MAP (Mono-Ammonium Phosphate),
compound fertilizers (NP and NPK). Fluorine salt is also produced as a by-product. The
basic information of SCP is as below.
Establishment: 1976
Commencement of commercial operation: 1983
Initial paid-in capital: 350 million Iraqi dinars (approx. 28 million yen at the current
exchange rate)
Authorized capital: 7,358 million Iraqi dinars (approx. 600 million yen at the
current exchange rate, as of 2006)
Number of employees: 2,916 as of 2006
Business contents: Production of phosphate rock in Akashat
Production of chemical fertilizers and intermediate products in

Al-Qaim Complex
Turnover: 29,961 million Iraq dinars (approx. 2,400 million yen at the
current exchange rate)
6-1
6.1.2 Plants and Other Facilities Owned by SCP
The construction of the Al-Qaim Phosphate Fertilizer Complex was started in 1978 by a
consortium led by a Belgian company, SYBERTA, and completed in 1983. The total
investment is said to be 1,000 million USD. The design capacity and the overview of major
products are as follows.
1) Phosphate rock (Unit-900) : Annual production 3.4 million tons

(Concentration is 22% of P2O5. Phosphate rock is mined
in Akashat, 170 km west-southwest of Al-Qaim. The
proven reserves of phosphate rock are approx. 0.5-0.7
billion tons and the estimated reserves are approx. 3-4
billion tons. All phosphate rock are transported to the
Al-Qaim plant by rail.)
2) Beneficiation unit (Unit-100) : Annual production 1.7 million tons, 2 lines

(The concentration of P2O5 delivered from Akashat is
enriched from 22% to 30%. This process and all
processes after this are carried out in Al-Qaim.)
3) Sulfuric acid production plant (Unit-200): 98.5% sulfuric acid, annual production 1.5 million
tons
(Has a daily production capacity of 1,500 tons with 3
lines. Sulfur used for production is delivered from
Mishraq Sulfur Mine in Mousel and oil refineries in the
country.)
4) Phosphoric acid production plant (Unit-300): Liquid phosphate of 54% P2O5, annual
production 0.83 million tons
(Has a daily production of 1,260 tons with 2 lines.
Materials are phosphate rock and sulfuric acid.)
5) Ammonia production plant (Unit-451): Annual production 50,000 tons

(Natural gas used for this production is supplied via a
pipeline from Kirkuk, in the north of Iraq. However,
the plant has been shut down since 1990 and thus liquid
ammonia is currently transported by tank truck from a
fertilizer plant in Baiji.)
6-2
6) Fertilizer production plant (Unit-400)

6-1) TSP (Triple Super Phosphate)
Total annual production of 600,000 tons (45% P2O5 concentration) with 2 lines
Raw materials: Phosphate liquid (0.44), phosphate rock (0.385)
* Figures in the parenthesis indicate the amount of raw materials in ton required
to produce 1 ton of TSP.
Use: It is hard to dissolve in water and suitable for acid soil, volcanic ash soil
and soil improvement of poor soil. It dissolves and is absorbed in the
organic acid in root crop. It has a slow-acting effect.
6-2) MAP (Mono-ammonium Phosphate)

Annual production of 280,000 tons with 1 line (52% P2O5 concentration, 11%
nitrogen concentration)
Raw materials: Phosphoric acid (0.578), ammonia (0.144)
Use: The mix ratio of nitrogen and phosphorus is excellent and it is an essential
fertilizer for the growth in the early stage of various crops. It is also
frequently used as the intermediate as raw materials of compound
fertilizers.
6-3) Compound fertilizer (NP and NPK)

NP and NPK: Annual production of 655,000 tons with 2 lines
Because potassium fertilizers are rarely needed due to the
property of the soil in Iraq, the plant mainly produces NP.
Raw materials: For NP (N27:P27)

Urea (0.472), MAP (0.51), sulfuric acid (0.005)
For NPK (N18, P18:K18)
Urea (0.317), MAP (0.329), KCL (0.317), sulfate (0.028)
* Urea is transported from fertilizer plants in Baiji in northern
Iraq and Basrah in southern Iraq by truck. Ammonia is
transported in liquid form from a fertilizer plant in Baiji by
tank truck.
Use: Fertilizers whose total contents of nitrogen, phosphate and potassium

exceed 30 percent are called compound fertilizers. In the case of SCP,
the ingredient content ratio of NP is N:P = 27:27. The N:P:K ratio of
NPK is 18:18:18.
6-3
What is important in selecting a compound fertilizer is the balance of the

three ingredients. Horizon-type fertilizers with well-balanced contents
of the three ingredients are suitable as base fertilizers and the mountain
type with high contents of phosphate is suitable as base fertilizers for
long-term crops (fruit vegetables, root vegetables and flowers) that require
a large amount of phosphate. Valley-type fertilizers with low contents of
phosphate are suitable as base fertilizers for leafy vegetables with a short
growing period as well as for top-dressing.
7) Sodium fluorine production plant: (Unit-500). By adding and reacting aluminum hydroxide
with fluorosilicate that is a byproduct of phosphoric acid produces
sodium fluorine. The product is used as an alternative to zeolite,
mainly for detergent manufacturing. However, the plant is hardly
operated due to manufacturing technical problems.
8) Utility infrastructure: (Unit-620) Power generator - design capacity 34.8MW (2 diesel

power generators, 2 steam turbine generators; currently only 1
diesel generator is operating.)
Water intake facility ‐180,000M3/d. (from the Euphrates)

Compressed air ‐144,000 M3/d. Wastewater treatment installation
Roads and railroads are well developed to connect the plants with
the outside. For example, they are connected to such major cities
as Baghdad, Baiji, Mosul, Kirkuk and Basrah and used for
transportation of raw materials and products shipment. There is a
special cargo line to connect with the phosphate ore production site
of Akashat. There is also a warehouse for product exportation in
Umm Qasr south of Basrah from where products are exported.
Roads and railroads between plants and with the outside are well-developed. They connect
major regions and major cities including Baghdada, Beiji, Mousel, Kirkuk and Basrah, used for
transportation of raw materials and shipment of products. Especially, there is a special freight
line connecting with Akashat, where phosphate rocks are produced. There is also a warehouse
for export in Umm Qasr, to the south of Basrah, from where products are exported.
6-4
6.1.3 Trend of SCP Operation
The table and figure below show the trend of production and sales volumes of each product
for the last 27 years from the beginning of its operation in 1983 to 2009.
Table 6.1-1: Trend of Production and Sales Volumes of SCP Products (1983-2006)
(Unit: ton)
1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
TSP Production 229,898 294,195 389,549 378,533 454,098 478,294 322,557 327,145 6,235 92,745 114,295 65,469 24,145 27,930
(Capacity 600,000 tons) Sales 178,538 337,294 349,866 361,631 483,651 387,112 293,529 731,520 17,052 13,800 25,597 3,369 5,428 29,724
MAP Production 76,142 74,649 115,253 153,509 101,358 173,964 203,208 108,640 14,145 69,250 64,445 48,786 62,645 4,854
(Capacity 280,000 tons) Sales 26 53,501 21 17,624 59,338 60,770 64,480 37,427 0 20 48 16 9,955 5,994
NP & NPK Production 82,932 110,179 224,080 181,168 212,715 363,242 281,323 244,618 175,718 314,507 409,583 394,942 276,890 227,350
(Capacity 655,000 tons) Sales 49,312 123,146 172,555 244,230 210,026 69,563 375,150 390,076 162,715 325,612 406,546 393,740 273,561 224,051
Phosphoric Acid Production 140,342 148,207 220,032 230,032 235,210 272,880 258,089 211,050 13,855 80,696 100,580 69,598 53,785 36,235
(Capacity 400,000 tons) Sales
Sulphuric Acid Production 514,807 507,217 763,507 753,330 885,190 1,023,500 984,147 784,080 65,176 338,424 431,090 323,930 278,700 217,550
(Capacity 1,500,000 tons) Sales
Table 6.1-1 continued

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Total
TSP Production 27,900 6,790 13,030 51,525 73,110 112,210 25,690 0 0 0 8,100 1,000 4,800 3,529,243
(Capacity 600,000 tons) Sales 27,603 4,412 5,895 52,642 87,100 122,381 25,998 1,122 0 0 5,368 5,645 0 3,556,277
MAP Production 0 11,135 3,900 3,900 11,595 11,595 5,860 0 0 0 0 0 0 1,318,833
(Capacity 280,000 tons) Sales 132 35 2,717 942 45 4 221 0 0 0 0 0 0 313,316
NP & NPK Production 288,000 192,370 242,900 228,220 247,340 343,340 81,600 16,600 82,550 81,500 35,450 112,650 147,800 5,599,567
(Capacity 655,000 tons) Sales 293,860 190,255 218,644 167,833 378,999 164,612 65,421 33,721 45,110 54,409 69,736 12,069 126,268 5,241,220
Phosphoric Acid Production 39,095 18,135 25,665 37,485 50,075 75,540 18,870 0 2,400 0 4,567 385 1,850 2,344,658
(Capacity 400,000 tons) Sales 0
Sulphuric Acid Production 191,918 134,940 182,910 193,250 232,200 282,500 49,050 3,700 19,000 25,900 0 21,800 30,650 9,238,466
(Capacity 1,500,000 tons) Sales 0
(Source: SCP Data, April 2000)
SCP　Product-wise Production Result (tons)

1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
83
85
87
89
91
93
95
97
99
01
03
05
07
09
19
19
19
19
19
19
19
19
19
20
20
20
20
20
TSP MAP NP & NPK Phosphoric Acid Sulphuric Acid
Figure 6.1-1: Trend of SCP Production Volume by Product

The table below shows the average of production and sales volumes of each product for the
last 27 years from the beginning of its operation in 1983 to 2009.
6-5
Table 6.1-2: SCP Activities

Average of production Average of production and
and sales volumes for sales volumes for 27 years
27 years Ratio of design capacity
(ton/year)
Production
130,713 21.8%
TSP volume
(Design capacity 600,000 tons) Sales
131,714 22.0%
volume
Production
48,846 17.4%
MAP volume
11,604 4.1%
volume
Production
207,391 31.7%
NP&NPK volume
194,119 29.6%
volume
Production
86,839 21.7%
Phosphoric Acid volume
volume
Production
Sulphuric Acid 342,165 22.8%
volume
(Design capacity 1,500,000
Sales
tons)
volume
SCP’s operation grew at a relatively steady pace since its opening in 1983 in the midst of the
long-lasting Iran-Iraq War (1980-1988). Specifically, the operation rate by product and process
grew to 80% for TSP, 55% for NP, 68% for phosphate and 68% for sulphate in 1988. However,
following the Iran-Iraq War, Iraq had to take a wartime regime continuously because of the
breakout of the Gulf War II in 1990 when Iraq invaded Kuwait. The invasion of Iraq that
began in 2003 led by the US and UK military forces, which is also called Gulf War III, led to
the demise of Saddam Hussein’s regime and further battered the Iraqi economy. This series of
events forced SCP’s business performance to drop significantly. Study Team will first discuss
the relationship between the wartime economy (especially relationship with Gulf War II) and the
business performance of SCP.
・ The Iran-Iraq War that broke out in 1980 and lasted eight years posed a huge economic
and social burden to Iraq. The two countries attacked each other’s oil plants that are
their economic lifeblood, causing serious damage to them. Crude oil exportation on
which Iraqi economy depended declined significantly, the costs of the war increased,
and inflow of investment funds from overseas was hindered for a long time. As a
6-6
result, the nation’s economy became short of funds and stagnant inevitably. The war
is said to have caused at least 100-billion-dollar economic damage to Iraq.
・ Gulf War II that broke out on August 2, 1990, worsened the situation. According to
Iraq, Kuwait extracted a huge volume of crude oil from Rumaila Oil Field that is
originally Iraqi territory and the war broke out to prevent the extraction. However, the
aerial bombardment from January 17,1991, by the allied forces caused damage to Iraq
to successfully prevent it from making a move and the war ended about one month later
on February 28, 1991. It is undoubtable that the damage caused to various production
facilities in Iraq accelerated its economic exhaustion. The international sanctions
imposed on Iraq (1990-2003) for its invasion of Kuwait is one of the key factors that
prevented the recovery of Iraqi economy.
・ Against the backdrop, SCP’s operation further deteriorated. Its management

worsened due to a shortage of funds and goods, serious shortage of quality goods, for
example, (because the oil export was significantly restricted and its purchasing power
dropped remarkably), due to the international economic sanctions. As a result, SCP
had no other way but to use low-quality parts, which prevented it from maintaining the
facility properly. Furthermore, SCP plant was seriously hit by the airstrikes by the
allied forces in February 1991 (about 70 strikes, according to sources) and its
production facility was severely destroyed.
・ As a result, SCP’s operation rate dropped significantly. The war had a catastrophic
impact on the operation of most of the processes in 1991 and 1992. The operation
rate (to its design capacity) in 1991 was 1 % for TSP, 26% for NP, 1.6% for phosphoric
acid and 4.3% for sulfuric acid. The low operation rate has not changed much until
today through Gulf War III in 2003.
・ Ammonia production required for producing MAP that is a raw material for compound
NP was completely suspended at the Al-Qaim plant. In order to obtain ammonia, it is
transported from the Baiji plant by tank truck. However, it has become difficult to
secure a necessary amount because of the worsening safety of the areas along the
transportation route and the rising transportation cost. As a result, MAP production
fell drastically after 1997, having a serious adverse impact on the production of
compound fertilizer. There is a rising momentum toward the construction of a
large-scale ammonia and urea facility in the Al-Qaim plant for the improvement of the
condition and development of the plant. This will be discussed later.
・ Iraqi Ministry of Industry and Minerals has led the production plant reconstruction plan
and great efforts have been made to restore the facilities to the level of the design
capacity since the end of Gulf War II. However, the negative impacts described
6-7
earlier, especially the impact of the international economic sanctions, have severely
hindered the pursuit of the reconstruction plan.
・ Going through the 2003 Iraq War (the Saddam Hussein’s regime collapsed as a result
of the invasion by allied forces led by the US and the UK), the situation is worse
mainly due to nationwide worsening security and political turmoil. It is true that its
economic activities are mostly stagnant.
・ Against the backdrop, SCP’s situation has further deteriorated. Production of TSP,
MAP and phosphate has been close to zero since 2004 and the operation rate of NP and
sulfuric acid is around 12% and 1.2%, respectively. It is highly regrettable to say that
the plant as a whole is not functioning at all.
・ Analysis of the profit and loss statement and balance sheet is of great importance to
understand corporate management conditions in a normal situation. However, Study
Team have yet to acquire financial statements of SCP. Although Study Team cannot
assure firmly, it is estimated that SCP has a huge amount of cumulative losses when the
very low operation rate for a long time is taken into consideration. Its accounting and
financial conditions would threaten its survival if it were not a state-owned company.
・ The figure below amplifies the conditions stated above, showing the situation in which
production volume of crude oil that is lifeblood of Iraq inevitably dropped drastically
after each major conflicts including the Iraq-Iran War. The figure shows the trend of
crude oil production volume based on UN document. (Unit: 10,000 tons)
Iraq Oil Production

10 thousand tons/y
20,000
15,000
10,000
5,000
0
72
97
03
27
30
38
40
50
60
70
75
86
90
93
19
19
19
19
19
19
20
19
19
19
19
19
19
19
Year
Year
Figure 6.1-2: Trend of Crude Oil Production Volume in Iraq

(Source: Compiled by Study Team based on UN document)
6-8
6.1.4 SCP Product Prices
SCP document (Investment File of Rehabilitation, The Fertilizer Complex for State
Company for Phosphate, April 2009) gives the product prices information in the table below.
Because it is unclear when the prices were used, exchange rate in 2007 (1,267ID/$) is used for
convenience.
Table 6.1-3: SCP Product Prices
Prices for domestic sale Prices for importation

ID/ton $/ton ID/ton $/ton
NP 425,000.0 335.4 506,800.0 400.0
TSP 750,000.0 591.9 506,800.0 400.0
Sulphuric acid 500,000.0 394.6 - -
(Source: Calculated by Study Team based on SCP document)
6.2 Current Status of Operation of Al-Qaim Phosphate Fertilizer Complex (Result and
Review of Field Survey)
The basic information of SCP (including the outline of each unit) is described in Section 6.1.
In this section Study Team will discuss the design capacity, current production capacity,
operation status, issues and technical observations drawn through information gathering and
field survey about Akashat phosphate rocks mines and Al-Qaim Phosphate Fertilizer Complex.
As previously stated, study team applied a local partner who was able to enter Iraq because
it was difficult for the study team to conduct survey in the country due to still remaining
concerns about security. The local partner conducted field survey from February 15 to 17,
2010. The study team received their feedback about the survey, photos and video of the sites
in a report meeting held in Beirut on March 1 and 2, 2010.
6.2.1 Overall Process Flow and Plant Overview of Al-Qaim Phosphate Fertilizer
Complex
The overall process flow of Al-Qaim Phosphate Fertilizer Complex is shown in Figure 6.2-1
and the Complex overview in Figure 6.2-2.
6-9
AKASHAT
Mine U-900
20% p2o5 Utility

Beneficiation U-620 Ammonia
U-100 U-451 P.Air
30% p2o5 I.Air
To All Units
Sulfuric Acid T.R.Water
Phosphoric Acid
Gypsum Stack U-２０0
U-300 H2SO4 98% C.Water
Urea N.Gas
KCl
P2O5 54% Raw Material M.P.steam
Handling U-661 L.P.Steam
Fluosillicic Acid (H2SIF6)
El
Fertilizer （Raw Material）
U-４00 El.Power
Aluminium Hydroxide
TSP NP NPK MAP
Store
Store
Fluorine Salts Aluminium Fluoride
U-500
Figure 6.2-1: Overall Process Flow of Al-Qaim Phosphate Fertilizer Complex

6-10
Plant overview of AL-Qaim
③ ②
① Main Administration Building
② General Warehouse & Workshop
③ (Uranium Purification Plant)
①
(no more existing)
④ Utilities Section
⑤ Rock Phosphate Beneficiation Plant
④
⑧ ⑨
⑩
6-11
⑥
⑤
⑥ Phosphoric Acid Plant
⑦ Fertilizer Plant (NPK + MAP + TSP)
and Products Storage House
⑦ ⑧ Ammonia Plant (150 t/d)
⑨ Auto-mobile & Heavy Vehicles Store
& Workshop
⑩ Sulfuric Acid Plant
⑪ Fluorine Salts Planｔ
(Al2F3 + Na3 LF6)
⑪
Figure 6.2-2: Complex Overview

6.2.2 Flow (Block) Diagram, Design/Current Capacity, Issues and Technical

Observations of Each Unit
6.2.2.1 Akashat Mine (Phosphate rocks Mining Unit)
1) Block Flow of this unit is shown in Figure 6.2-3.
AKASHAT MINE
Geological surveying sampling

Dozing top Drilling Blasting Drilling
soil overburden overburden Rock phosphate
AKASHAT MINE excavating
by dragline
Blasting phosphate
Stockpiling
55000 ton
crushing Hauling Rock
excavating
by shovel
To Al-kaim fertilizer Complex

reclaiming weighing Loading
Train
wagons
sampling
Figure 6.2-3: Akashat Mine (Phosphate rocks Mining Unit) Block Flow
2) Design capacity, current capacity, issues and technical observations of this unit
2-1) Design capacity and current capacity
Although the design capacity of this unit is 3,400,000 tons/year, the current production
capacity is about 27% of it.
2-2) Issues, technical observations and others (photos of issue examples attached)
Restoration of the production capacity requires repair and new purchase of major
equipments such as bulldozers, rock drills, mechanical shovels, storage facilities (chutes)
and measuring instruments.
Supply of necessary explosives for excavation is another important factor. (Currently

explosives are controlled by the army and not supplied to SCP.)
6-12
180 workers are engaged in the operation and maintenance of this unit.
2-3) Diagnosis of the facilities (A: No Problems B: To be repaired C: To be renewed)

Structure/ Unit
Unit No. Equipment Piping Instrument Soil
Foundation Overall
900 B B C A A B
Figure 6.2-4: Current Status of Storage Facilities for Phosphate rocks

Phosphate rocks are released at a long distance from the unloading point, which prevents
proper loading. Chutes need repairing.
6-13
6.2.2.2 Beneficiation Unit
BENEFICATION UNIT
RAW PHOSPHATE 20% P2O5

Homogeneous store Crushing & 28000 ton
UNLOADING Stacker & reclaimer screaning unit Circular store
AKASHAT MINE STATION
Calculation unit
60000 ton
WASHING PLANT
Kiln no.2
Kiln no.1
P2O5 store
Line NO.1
P2O5 30% TRW
Slacking unit
5 slackers scrubbers
Repulping Unit
Line NO.2
P2O5 30% P2O5 30%

TO PHOSPHORIC TO FERTILIZER Thickener
ACID UNIT UNIT 110 M
DIA.
TRW
To slime disposal
Figure 6.2-5: Beneficiation Unit Block Flow

2) Licensor, design capacity, current capacity, issues and technical observations of this unit
2-1) Licensor: F.L. SMITH (Denmark)
2-2) Design capacity and actual production
Compared with the design capacity of 1.7 million/year, the actual production of
concentrated phosphate rocks in 2009 was 19,500 tons.
Restoration of the production capacity requires the following actions.
- Increase of spare (replacement) parts for the stackers and reclaimers and setup of a
new management system (currently operated manually)
- Set-up of a cleaning system (to remove impurities)
6-14
- Repair or replacement of an electromagnetic motor of a screen
- Replacement of a hammer of a crusher
- Repair of fireproof bricks of a calciner
- Increase of spare (replacement) parts for other devices such as pumps and motors

Structure/ Unit
Foundation Overall
100 B B C A A B
Figure 6.2-6: Stacker and Reclaimer
According to the report by the local partner, they are currently operated and controlled
manually.
A new control system is required.
6-15
Figure 6.2-7: Current Status of Washing System
Corrosion is seen all over the equipments and pipes. They need to be replaced with new
ones.
Figure 6.2-8: Kiln 2
Support rollers do not touch the main body and therefore are not in operation. Inner
refractory materials may be damaged.
6-16
6.2.2.3 Sulfuric Acid Production Unit
1) Block Flow of this is shown in Figure 6.2-9.
Steam SULFURIC ACID UNIT

Sulfur Hot gas
2 process pit Boiler
furnace filter
Feed water
gas-gas gas-gas
4 sulfur tank
heat exg.2 heat exg.1
Converter
Production 1
Sulfur 2
store Air
blower Super heater
3
4
Sulfur
5
filter
ECO ECO
1 2
Sulfur
milting&
Naturalization
aria Drying Inter mediate
Final tower
Air tower tower
filter
Sulfur area Sulfur acid tanks store Product stack

Acid tank
Figure 6.2-9: Sulfuric Acid Production Block Flow

2-1) Licensor: PRAYON (Belgium)
Although there are 3 lines that have a total design capacity of 1.5 million tons/year,
only one line is currently in operation. The actual production in 2009 was 30,650 tons,
which is only 2% of the design capacity.
Components, pipes, instruments and other items of this unit are badly damaged, and
even the ground is settled because the soil is contaminated with leaked acid. It seems
extremely difficult to recover the production capacity only by rehabilitating the existing
facilities.
6-17

Structure/ Unit
Foundation Overall
200 C C C B C C
Figure 6.2-10: Sulfur Melting & Neutralization Area
Damage is seen all over, such as cracks on reinforced concrete pits and corrosion of
pipes.
Figure 6.2-11: Sulfur Furnace
Corrosion is seen all over the unit. The whole unit was under repair when the photos
were taken. It is unknown whether this reactor is still under repair or is usable.
6-18
Figure 6.2-12: Current Condition of Sulfuric Acid Tank and Soil Condition
There is almost no insulation/insulation cover on the tank.
Moreover, the ground is settled because the soil is decreased by the reaction of soil
components to leaked sulfuric acid. (The tank is lifted by a hydraulic jack.)
6.2.2.4 Phosphoric Acid Production Unit
PHOSPHORIC ACID UNIT

Acid recycle 22% 450m3/hr
H2SO4 100m3/hr 5% acid cacke wash water
300m3/hr
Rock phos 183t/hr Gy Filter 1 Gypsum dilution
30% 22% 5% water
waste
300m3/hr
Gypsum wast
Gypsun
5% acid tank
Dig Dig Dig
Reactor .A .B .C Gypsum wast
Gy
30% 22% 5% Filter 2 to gypsum
waste
disposal
160m3/hr Weak acid

Hot water from plant
Cooling tower
Weak
acid Cold water to plant
tank
30% P2O5 32.5% P2O5 43.2% P2O5 54% P2O5

Con. LINE1 S1 S2 S3 Make up 430m3/hr
30% P2O5 32.5% P2O5 43.2% P2O5 54% P2O5 Concentrate EXPORT TO U400
Con. LINE2 acid tanks
S1 S2 S3
Figure 6.2-13 Phosphoric Acid Block Flow

6-19
2-1) Licensor: COPPEE-RUST
Although the total design capacity of these 2 lines is 400,000 tons/year, the actual
production in 2009 was only 1,850 tons. (Maximum approx. 130 tons/day)
The following components and pipes need to be replaced or repaired.
- Gear Box and mixer on in the reactor

- Damage of pump lining (synthetic rubber)
- Gypsum (removal) filter
- Graphite heat exchanger
- Circulation pumps and motors
- Phosphoric acid storage tank
- Pipes with synthetic rubber lining

Structure/ Unit
Foundation Overall
300 B C C B B B
Figure 6.2-14: Gear Box and Motors on Phosphoric Acid Reactor

According to the report by the local partner, gear box of mixer is corroded and need to
be replaced.
6-20
Figure 6.2-15: Current Condition of Filters
Gypsum filters including frames need to be replaced as they have deteriorated with age.
6.2.2.5 Fertilizer Production Unit
NPK FERTILIZER UNIT

STEAM
H2SO4
Hot
MAP Granular Dryer
Screen
UREA
Hammering
NH3
KCL
AIR BLOWER
Furnace
N. GAS
NP Product
Cooler Cold screen Cooler
store
Figure 6.2-16 Fertilizer Production Block Flow

6-21
2-1) Licensor: DARY POWER GAS (UK)
Unit Design Capacity Production in 2009 Current Capacity

TSP 600,000 tons/year 4,800 tons 200 tons/day
MAP 280,000 tons/year 0 ton 300 tons/day
NP/NPK 655,000 tons/year 147,800 tons 400 tons/day
The following devices of each unit especially require repair or replacement.
TSP: Reaction tank, granulator, filters, cooler and furnace
MAP: Evaporator, dryer, eliminator and storage house
NP/NPK: Granulator, dryer, screen, cooler, crusher and furnace
All units: Large-scale repair of a de-dusting system is required.

Structure/ Unit
Foundation Overall
400 B C C B A B
6-22
Figure 6.2-17: Current Condition around TSP Reaction Tank

Corrosion is seen around the tank and surrounding pipes. Repair work is required.
Figure 6.2-18: Current Condition of Fertilizer Product Storagehouse
The building is damaged and needs to be repaired.
6-23
Figure 6.2-19: Current Condition of De dusting System
According to the report by the local partner, the de-dusting system has never operated
since the beginning of the operation of the complex, and serious damages such as corrosion
and choking have been caused by dust generated by the unit operation. Large-scale repair
work is required.
6-24
6.2.2.6 Ammonia Production Unit
Ammonia Unit (U451)
Air Steam Air
Natural Gas High Temp..

De- Primary Secondary
Shift
Sulfurlizer Reformer Reformer
Converter
Compression
Ammonia
Synthesis Low Temp.
CO2
Converter Methanator Shift
Removal
Converter
Liquid
Refrigeration
Ammonia
Unit
Figure 6.2-20 Ammonia Production Block Flow

2) Licensor, design capacity, current capacity and issues of this unit
2-1) Licensor: HOWE-BAKER
Although the unit has a design capacity of 500,000 tons/year, the operation has stopped
since 1991.
As the unit has been left with no appropriate provisions for preservation since the
operation was stopped in 1991, not only the synthetic gas compressor, which is the most
important component, but also Primary Reformer (Tube/hose), heat exchangers and other
devices seem to need replacing. Moreover, many components including pumps, motors
and instruments have been removed to be used for other units.
Under such conditions, it seems extremely difficult to restore the production capacity
by rehabilitating the existing unit.
Further, current compressor system (multi-purpose) has difficulties for

operation/control. Therefore, new compressor system (individual-use) should be applied.
6-25
This will cause change of process scheme considering above Conditions, this ammonia
production unit should be newly designed and constructed.

Structure/ Unit
Foundation Overall
451 B B C A A C
Figure 6.2-21: Existing Multi-purpose Compressor
As the operation method for the existing compressor is complicated and difficult, this
multipurpose system needs to be replaced with single-purpose compressors.
Figure 6.2-22: Current Condition of Primary Reformer
All tubes and hoses are corroded and need to be replaced.
6-26
6.2.2.7 Fluorine Salts Production Unit
This unit had production lines that have annual design capacities to produce 11,000 tons of
aluminium fluoride (AlF3) and 6,400 tons of cryolite (Na3AlF6). However, the unit is not in
operation for various reasons such as lack of materials, damage caused by the Gulf War and
decreased market demand.
6.2.2.8 Utility Supply Units
Processing capacity, current status, issues and technical observations of each unit
1) Water treatment unit
- Although the current capacity is only approx. 50% of the design capacity of180,000
m3/day, the current demand is met.
2) Compressed air unit
- The design capacity is 144,000 m3/day.
Although there are 6 compressors that have a capacity of 2,084 m3/hour, the STC report
points out that two of them need to be replaced.
3) Electric power supply unit
- The design capacity is 34.8MW, with two 28.8 MW power sources (turbine) and two 6
MW sources (diesel).
The local partner’s report says that 50 MW turbine power sources are required. The
current condition of the operation of the existing equipments seems unstable.
4) Wastewater treatment unit
- There are two lines (for acidic wastewater and other types of wastewater). Wastewater
is sent to a reservoir via a pit with synthetic rubber lining.
There is no serious issue now.
5) Diagnosis of the facilities (A: No Problems B: To be repaired C: To be renewed)

Structure/ Unit
Foundation Overall
620 B B C A A B
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6.2.2.9 Summary of Diagnosis of the facilities
Unit-wise diagnosis is summarized into below table.
It should be so judged that there are almost no equipment/Piping system/Instruments that

can be used as their present conditions. And, even though the assessment is ‘B’, it might need
quite large-scale repairing. Therefore, there will be many cases that replacement (renewal)
instead of repairing would be more effective and economical, according to further detail
investigations.
Unit 200 (Sulfuric Acid Plant) and Unit 451(Ammonia Unit) should be newly constructed in
adjacent area.
Structure/
Unit No. Facility Equipment Piping Instrument Soil Unit
Foundation
100 Beficiation B B C A A B
200 Sulfuric Acid C C C B C C
300 Phosphoric Acid B C C B B B
400 Fertilizer B C C B A B
451 Ammonia B B C A A C
620 Utility B B C A A B
900 Akasht Mine B B C A A B
6.3 Outlook of Akashat Mine Phosphate Rock Production
6.3.1 Akashat Mine
The mine is located about 150 km to the south-west of the Al-Qaim city and it covers over
50 km2 with proven reserves of 500 million tons of raw material (Calcium Phosphate,
Concentration of average 21~23 % of P2O5).
Akashat mine is an open pit mine equipped with many mining equipment, production
facilities and infrastructure, including housing complex of 600 units.
This phosphate production facilities have obtained International Stands of “ISO-9001”.
The original production facilities with the design capacity of 3.4 million tons/year (one shift
per day – base) were constructed from 1977 and they started operation from 1984.
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6.3.2 Summary of the existing facilities
▪ Nos. pf Production Line : No.1 & No.2 lines for two quarries focused among five
quarries
▪ Current Operation : One line is working and another is not operated due to the
performance draw back of the chemical plant in Al-Qaim.
(Approximately 30% ±α Operating rate and maximum
production capacity reached to 71% of design capacity in
1988)
▪ Annual Production Volume : Ave. 600,000 tons/year (1995~2003) After March, 2003
decreased due to war
▪ Original Design Production Capacity : 3,400,000 tons/year (12 hrs/day base)
▪ Mining Equipment : Bull-dozer, Excavators, Shovel-cars, Dragline Machines
Drilling Machines, Wheel Loaders, Off-road Dump
Trucks
▪ Nos. of Quarry : Five main quarries of Calcium Phosphate Deposit spread
over in the area of 50 km2, which was found in 1963.
▪ Proven Reservoir : Approx. 500 million tons
▪ SYBETRA : Belgian company brought the mine into production after
1975 Site facilities and infrastructure were also
constructed by them.
▪ Related Projects : - Water pipeline project (170km) for feed water to
Akashat site
- Rail way project connecting between Akashat site and
Al-Qaim complex
- Housing complex with 600 housing units besides the
site
▪ Start of Operation : July, 1981 Commissioning run was started
July, 1982 Commercial operation was commenced
6.3.3 Observation of the existing facilities working conditions
In general there are not so much sophisticated equipment existed and the facilities are
partially operated at low load factor (Ave, 600,00 tons per years)
The Major reasons for such low level of production against the design capacity seem to be
as follows:
* Performance draw back of Chemical plants in Al-Qaim (Low demand of feedstock)
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* Mining equipment are working under not good condition due to no spare parts and poor
maintenance activities
Power and water supply have had not so serious problems in capacity and meet current
demand of both the mine facilities and housing complex. However power failure seems to
have occurred very often.
Elec. power supply : HT 132 KV lines from Al-Qaim plant
Power consumption : ≦ 7 MWH at mine facilities, including housing complex
6.3.4 Necessity of Rehabilitation
▪ Production equipment : To be partly replaced with new mining equipment, such as

Bulldozer, Excavator, Power Shovel and Drilling Rig.
▪ Utilities supply system : Currently no need to rehabilitate largely subject to minor repairing
and remedical work to be done
▪ Civil Infrastructure : There may be not serious as per photographs
▪ Transportation System : Railway seems to have no serious defects.

Operation management system might have potentially inferior
aspects to be improved and/or upgraded.
Traffic control system seems to have had the damages so that,
their control system could be necessary to be restored.
6.4 Related Infrastructure
Generally main road network are maintained to be working well accrossing SCP Complex in
Al-Qaim and extending to Akashat Mine upto Syrian border.
The railway system is still working and phosphate rocks are transported from Akashat mine
to Al-Qaim Complex.
Iraqi missions’ comment is that the control units of train operation control system are
currently not worked well.
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The summary of the related infrastructure to SCP Complex is illustrated below:
1. Railway system: Currently working
Mishraq
Sulfur (99.6% purity) by
120km Rail Wagons
Akashat Mine Al-Qaim
20% P2O5 rocks Liquid NH3 by Special
For Products
Container or Wagons
Shipment by Rail
Wagons
Kohl Al Zubair
2. Road : Working
3. Telecommunication : Not good at this moment!
4. Electricity : Available, but not good supply performance which has caused
frequent power failures.
5. Water : River water is used for both industrial and town-use
Water Intake
System
Water Treatment and
Distribution Pump System
Akashat Mine
Several Towns Al-Qaim Complex
6.5 Other topics, concern
6.5.1 To Build up control system of whole complex
At present, it was found that in each unit of the complex, instrument and control system are
not functioned according to its design, and that they are to be newly installed.
After restoring of complex capacity, it should be required to build up control system of the
whole complex.
6.5.2 Human Resource Development for operation/maintenance
To utilize new control/maintenance system effectively after rehabilitation and/or renewal, it

should be required to train the related employees with sufficient preparing time
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6.5.3 Improvement of Management System
At present, actual production capacity of the complex is in general around 10% of its design
capacity and therefore, it is expected that there are not much difficulties for the management of
the resources (workforce/equipment and materials/finance) in quality and quantity. However,
after restoring of the capacity of the complex, the resources would be some times of the current
conditions, then remarkable improvement of management system and staff shall be required.
6.5.4 Procurement of Spare Parts
Many equipment in this complex had been stopped of their production, and it is expected
that obtaining spare parts that is essential for the plant operation is difficult.
It is required to prepare technical specification to procure alternatives and to find the

vendors.
6.5.5 Waste Disposal (Gypsum)
Big quantity of gypsum is produced as by-product in the process of producing phosphoric

acid. At present, there are no problems to waste the gypsum without any treatment.
However, restoring the plant capacity would cause jumping up of volume of waste gypsum.
Then investigation of the treatment of waste gypsum, including utilizing it, shall be made.
6.6 Rehabilitation Plan by SCP
6.6.1 Rehabilitation Plan Formulated by SCP (Investment File)
It is discussed in Chapter 4 that SCP’s phosphate chemical fertilizer complex in Al-Qaim

has been identified as an investment opportunity for the private sector. It has also been
described that individual SOEs draw up rehabilitation plans for their factories and plants in form
of “Investment Files” and release them to potential investors in the effort to attract private
investment. In accordance with this investment scheme, SCP compiled its rehabilitation plan
in an “Investment File” in April 2009. According to the Iraqi counterpart, the file is currently
under review by the government.
In its Investment File, SCP plans to recover the production capacity of the Al-Qaim
Complex to the 90% level of the design capacity. It stipulates that the investor will be
responsible for procuring necessary costs for executing the rehabilitation plan and for
recovering the fund invested and earning profits by operating the plant and selling the outputs
from the plant themselves after the rehabilitation is completed. The restoration of the Complex
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is intended to further develop the phosphate mine in Akashat, which produces the raw materials
of fertilizers, supply sufficient fertilizers to meet agricultural demand, and shift from imported
goods to domestically-produced items, thereby strengthening the foundations of the Iraqi
economy. The following summarizes the rehabilitation plan, subject to investment, as
described in the Investment File.
(1) Outline of SCP’s rehabilitation plan
Project contents: Rehabilitation of the phosphate chemical fertilizer complex in Al-Qaim,

operation and maintenance of the plant, sale of the products, and
financing for the project.
Facility included: Phosphate chemical fertilizer production equipment, and others

(including utility equipment)
Target: The operator is required to recover the plant’s production capacity to the
90% level of the design capacity.
Table 6.6-1: SCP’s Rehabilitation Goal
Design production capacity Production target

Product
TSP 600,000 540,000 (90%)
NP 655,000 589,500 (90%)
MAP (interim product) 280,000 252,000 (90%)
Total 1,255,000 1,129,500 (90%)
(Source: Investment File by SCP)
Term of implementation: To be determined (to be proposed by the operator.)

(2) The investor will be entitled to the following rights and bound by the following obligations
in the course of implementing the plan.
¾ The operator shall set up a corporation or a branch (hereinafter referred to as the

“operating company”) which is registered and located in Iraq. The operating
company may be a joint concern based on collaboration among multiple Iraqi or
non-Iraqi enterprises.
¾ The operator shall finance the project by itself, rehabilitate the existing Al-Qaim
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Complex, and operate and maintain the rehabilitated plant. The investors shall be
entitled to market the accomplished production in such quantities that are
proportional to their shares of capital contribution.
¾ The operator shall procure electricity necessary for the operation of the plant by itself.
(It needs to build a private power generating facility.)
¾ The operator shall be entitled to remit hard currency or the Iraqi currency to inside
and outside Iraq in accordance with the rules stipulated by the Central Bank of Iraq.
¾ The operator shall carry out an environmental impact assessment (EIA) and conform
to ISO14001, ISO9001 and other relevant European guidelines. The Ministry of
Industry and Minerals shall guarantee the operator an expropriation of land necessary
for disposing of wastes generated at the Complex.
¾ The operator shall construct a security structure by deploying security guards

throughout the term of the project, in collaboration with relevant ministries and
agencies. The operator shall be responsible for security inside the premises of the
plant and the governing authority shall undertake security outside.
¾ The operator shall not assign the right to the project, in whole or in part, to any third
party without the consent of the Ministry of Industry and Minerals.
¾ For the purpose of carrying out the project, the Investment Law 2006, No.13 enacted
in 2006 shall be applicable (refer to Chapter 4 for the details of the law). The Law
on SOEs (Law No.22) may also be applied at some point in the future.
(3) Rehabilitation costs
SCP gathered quotations for various types of equipment necessary for the rehabilitation plan
as part of their work to create the Investment File. The following lists the equipment
concerned and their estimated amounts.
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Equipment Estimated amount

(million U.S. dollars)
Phosphate mine 50
Rock sorters 30
(2 systems, including utilities)
Sulfuric acid production plant 130
(3 systems, including utilities and soil treatment)
Phosphoric acid production plant 105
(3 systems, including utilities and soil treatment)
TSP production plant 30
(2 systems)
NP production plant 30
(2 systems)
MAP production plant (granulating line) 40
Ammonia production plant 40
Utility facilities 100
(Waste disposal facility, a set of equipment for environmental protection)
Transport equipment for raw materials and products 20
Laboratory 20
Vehicles and heavy machines 20
Soil inspection and treatment facility 15
Total 630
6.6.2 Objective Observations on the Rehabilitation Plan
SCP’s rehabilitation plan was objectively examined from the standpoint of private investors.
The following points were identified as possible obstacles.
(1) Public safety in Iraq
Public safety in Iraq is yet to be satisfactory enough for many private companies to
participate in project in the country. Further improvement of public safety is a minimum
condition to be met for overseas private investors to participate in projects in Iraq.
(2) Technical difficulty of rehabilitation plan
As mentioned in Chapter 6.2, Al-Qaim Complex has not performed sufficient maintenance
due to lack of spare parts and funds for a long time and facilities are seriously damaged. The
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rehabilitation project with maintaining the current facilities as much as possible is predicted to
be very difficult technically and there will not be many contractors that will perform the duty on
site.
(3) High production target of rehabilitation plan
Although the operation rate of Al-Qaim Complex was once somewhere between 85 and 89%
around 1989, it has been low since then. Investors are committed to recovering the rate to 90%,
which is a very ambitious goal.
(4) Huge investment
Partly because many facilities need to be replaced or repaired, the rehabilitation of the
complex requires a huge fund. The quotation SCP produced by itself is based on a quotation
by a supplier around 2007. The amount needs to be reexamined.
(5) Commitment during project term
The operator needs to commit itself during the term until the operation rate reaches the
target level of 90%. It is difficult to estimate how long the rehabilitation project will require
for various reasons. If a penalty is imposed when the project cannot be completed within the
period, this is a severe condition for investors.
(6) Unstable domestic market
SCP products are purchased at a stable price with the subsidy from the Ministry of
Agriculture. Investors are very interested in whether the subsidy program will be applied and
whether the subsidy program may be revised at some point.
(7) Difficulty in product exportation
Exportation of products of Al-Qaim Complex has a disadvantage of transportation cost

because it is located inland. Competition with neighboring countries with phosphate rocks is
also a matter of concern.
Taking these obstacles into consideration, it must be noted that it is fairly difficult for SCP to
attract private investment based on this Investment File.
6-36
Chapter 7
Environmental and social impact in Industry and
Mineral sector in Mid-Western district of Iraq

Chapter 7 Environmental and social impact in Industry and
Chapter 7 Environmental and social impact in Industry and Mineral

sector in Mid-Western district of Iraq
7.1 Environmental Assessment
7.1.1 Current environmental situation in Mid-Western district of Iraq
It is said that the land area of Iraq can be roughly divided into four major geographical zones
as follows.
-Desert plateau: It locates on Mid-Western Iraq to occupy about 40% of Iraqi territory.
-Northeastern highlands: It occupies about 20% of the country territory.
-Northwest upland region: About 10% of Iraq territory
-Alluvial plain: Deltas of the Tigris and Euphrates Rivers to occupy 30% of Iraq
The major part of land area of 3 Governorates in Mid-Western of Iraq, where the possibility
of industrial rehabilitation project is surveyed, consists of both side of the Euphrates River and
huge area of desert plateau geography at west of the Euphrates River. The most of inhabitants
live on the banks of the Euphrates River. The desert plateau in this region consists of a broad,
stony plain with scattered stretches of sand, and sparsely inhabited by pastoral nomads. A
network of seasonal watercourses, so called wadis, runs from the country’s western borders
towards the Euphrates River. The density of industrial activities in this region is not so high
that the environmental issues brought by industries might be rather mild.
(1) Atmosphere
The atmospheric air quality is mainly affected by the gas exhausted from such as industrial
combustible facilities and vehicle engines. One of the important barometers to roughly
estimate the air quality might be fuel consumption and/or carbon dioxide (CO2) emission in the
country and/or district. CO2 emission intensity of Iraq, Iran and Saudi Arabia is compared in
Table 7.1-1 and that in Japan for reference.
7-1
Table 7.1-1: Comparison of Energy Intensity

Country Iraq Iran Saudi Arabia Japan
CO2 Emission Mt/y 91.45 465.90 357.90 1,236.34
Population Million 27.50 71.02 24.20 127.76
tCO2/Capita・y 3.33 6.56 14.79 9.68
2
Area Mkm 0.43 1.64 2.15 0.37
tCO2/Area・y 209.00 282.70 166.50 3,270.00
GDP (PPP) Bil.USD 28.52 554.02 360.74 3,620.00
tCO2/GDP(PPP) 3.21 0.84 0.99 0.34
(Source: IEA 2007 Indicator and CIA World Factbook)
The Iraq’s population-wise CO2 emission intensity is the lowest and the area-wise intensity
is intermediate position in the three countries. Through these two indexes, it is supposed that
the current overall air quality in Iraq might not be inferior to that of in Iran and Saudi Arabia
which have a border with Iraq respectively. The inferiority in GDP (PPP)-wise CO2 emission
intensity means that the air quality in Iraq will be able to further improve through energy
conservation activities to decrease fuel consumption and subsequent CO2 emission reduction.
The current air quality in the Mid-Western Iraq with less density of population and industrial
activities can be considered to be better than that of average throughout Iraq.
(2) Water quality
Unlike other Middle East countries, Iraq has abundant water resources given through two
international great rivers of the Tigris and the Euphrates which have been supporting
agricultural culture since the ancient Mesopotamian civilization era more than 8,000 years ago.
However, it is said that the water quality of both the Tigris River and the Euphrates River
has been gradually degrading caused by the flow reduction due to the dam and irrigation projects
implemented in the upstream countries of Turk and Syria. The Tigris River and the Euphrates
River join together in southeast town of Al-Qurnah in Iraq to form the Shat-Al-Arab. The
length of Shat-Al-Arab is approximate 200 km from the confluent of the Tigris and Euphrates to
mouth into Arabian Gulf. The salt content of Shat-Al-Arab water is about 1,500 ppm in the
Al-Basrah, representative industrial city in southern Iraq, which locates on the middle of the
Shat-Al-Arab. The industries around Al-Basrah unexceptionally utilize Shat-Al-Arab water
for their production activities. Due to the gradual increase of salt content, the Shat-Al-Arab
water is becoming difficult to be used without desalination treatment.
In Mid-Western Iraq, the target district to investigate the possibilities of industrial

rehabilitation projects, the Euphrates River water is utilized for both domestic and industrial
7-2
activities. Unlike the degraded Shat-Al-Arab water around Basrah, there is no qualitative
problem in the Euphrates River water to use it for industrial activities without special treatment
such as desalination. As mentioned above, the water inflow of Euphrates River to Iraq has
recently decreased. According to the US UPI news in July, 2009, Turk agreed with Iraq to
increase the water inflow of the Euphrates River to Iraq from 360 m3 a second to 570 m3.
Although the water inflow to Iraq through the Euphrates River seems to have increased in 2009,
it has extremely decreased from approximate 950 m3 a second in 2000. The decrease of water
supply through the Euphrates River might be serious problem for domestic, agricultural and
industrial activities in Mid-Western district of Iraq on the long term viewpoint.
(3) Solid/Liquid wastes
The enormous desert area, in Mid-Western Iraq, where scarce inhabitant exists, can be
utilized for harmlessness treatment and/or final disposal of both domestic and industrial wastes.
There might be no serious problem in solid waste disposal by landfill at unoccupied desert area
located far from residential zones. Also, there might be no serious problem to dry liquid
wastes in the sun and final landfill disposal at desert area.
(4) Hazardous materials (Heavy metal, poisonous materials)
After the harmlessness treatment by such as neutralization of acidic and/or alkali wastes and
passivation of heavy metal by cementation, the hazardous wastes can be handled as well as
non-hazardous wastes to final disposal by landfill. However, the heavy metal contained in the
catalysts is generally recycled by the catalyst regeneration in the manufacturer’s shop without
landfill disposal.
7.1.2 Environmental impact caused by the expected project
The working ratio of most industrial facilities which need rehabilitation is currently very
low not to bring the serious impacts to environment. The rehabilitation project is carried out to
restore the deadbeat production facilities to original one. Accordingly, the intensity of
environmental and/or social impact from the rehabilitated facilities will go back to that a few
decades ago when the working ratio of the facilities was high enough. In order to mitigate
additional environmental impact at high working ratio operating condition after rehabilitation
project, it might be important to apply environmentally mild technologies as far as possible.
Anyway, the environmental countermeasure of rehabilitation project should meet not only
domestic regulations and rules but also the internationally prevailing standards and/or guidelines
such as the EHS (Environmental, Health and Safety) Guidelines specified by IFC (International
Finance Corporation).
7-3
(1) Atmosphere
The representative industries in Mid-Western district of Iraq, most of which require

rehabilitation, are phosphorous fertilizer plant, cement plants and glass and ceramic plants.
One of the common features in these three types of the plant is to operate combustible facilities
emitting air pollutants more or less.
SOx emission will indispensably increase at high working ratio operating condition of the
facilities in proportion to the multiplication of fuel consumption and sulfur content in fuel.
However, it might be possible to mitigate the additional SOx emission by applying energy
conservation technologies developed after the initial construction of plant to be rehabilitated or
reduce SOx emission by applying flue-gas desulfurization technology.
In addition to the application of energy conservation technologies, the combustible

technologies to reduce NOx formation in the combustible facilities and/or flue-gas denitration
might be applicable for rehabilitation project to mitigate NOx emission from rehabilitated plant.
In order to reduce or not extremely increase the particulate matter (PM) emission from
combustible facilities, the necessity and availability to additionally install the electric dust
collector, bag filter or scrubber in the flue-gas exhaust system should be carefully studied.
(2) Water quality
The water consumption and effluents will undoubtedly increase after the implementation of
the rehabilitation project to raise the working ratio of the plant. The flow of the Euphrates
River has reduced during recent 10 years to make it difficult to expect limitless dilution of the
water pollutants in the effluent from domestic and/or industrial facilities into the Euphrates
River. Considering the less water flow in the Euphrates River in comparison with that a few
decades ago, the countermeasures to reduce water intake and drainage from and to the
Euphrates River will have to be included in the rehabilitation implementation plan in order to
minimize water pollution issues in downstream districts. For example, the deep treatment of
effluents and/or recycle use of treated effluents will be worth to study for rehabilitation project.
(3) Industrial wastes
Unlike air pollutants and water pollutants, industrial wastes do not essentially disperse or
move to other places. With sufficient landfill area for industrial wastes disposal at the
adequate location isolated from residential or public zone, industrial wastes does not cause
environmental issues. Even if the quantities of industrial wastes will increase after
rehabilitation project of specific plant, there will be generally no qualitative variation in wastes
dumped into landfill area.
7-4
7.1.3 Possible social impact from expected project
The negative social impact from rehabilitation project might be basically minimal excluding
the temporary impact during field construction works.
(1) Living environment
Most of industrial facilities in Iraq, which currently need rehabilitation projects, have been
operating at lower working ratio rate to scarcely produce profit during a few decades.
Accordingly, the societies and inhabitants surrounding such industrial facilities could not enjoy
the economic merit which might be brought to them by the positive production activities of the
industrial facilities. If rehabilitation project can restore the industrial activities of the facilities
to produce profits, the local economic condition will be improved. As shown in Chapter-2 the
per capita GDP (PPP) in Iraq is currently by far inferior to the neighboring countries of Iran and
Saudi Arabia which are oil-producing countries as well as Iraq. Through the successful
implementation of rehabilitation projects, Iraq will be able to increase its per capita GDP (PPP)
near that in Iran and Saudi Arabia in the future to improve the living standards of Iraqi nation.
(2) Inhabited Area and Expected Project Area
In Iraq, the environmental law specifies that the location of industrial project has to be
several kilometers away from inhabited area. (See next paragraph) Accordingly, the inhabited
area and industrial facilities are not coexistent in Iraq. As far as the rehabilitation project is
carried out within the existing territory of the plant, it will bring scarce environmental impact to
inhabited area at normal operating condition after construction works. During equipment
transportation stage and field construction stage, some impacts of noise and/or traffic congestion
might affect the inhabited area. However, these impacts will be only temporary ones under
field construction stage and it will not be so serious for the inhabitants near the project site. In
most of cases, an enormous number of field workers engaged in the project gather in the site at
construction stage to possibly make troubles with inhabitants. However, the most of State
Company in Iraq, which this investigation primarily targets for the rehabilitation project owner,
have enough man-power to carry out the most of field works of the project by itself not to
require so many external man-powers for the project implementation. Accordingly, the
possibility of conflict between construction workers and inhabitants might be low.
(3)Transportation of equipment during construction and its impact on residents
Because of deadbeat industrial activities in current Iraq, most of equipment and materials for
any kinds of rehabilitation project will have to be imported from foreign countries. The
transportation of equipment and materials is one of the most important matters for successful
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project implementation. Not only oversea transportation by the vessels, but also long distance
inland transportation by roads and/or railway might be indispensably required for the
rehabilitation project carried out in Mid-Western district of Iraq. As the inland transportation
by roads possibly cause the traffic congestion and/or traffic jam and/or traffic accidents, the
routes and schedule of major equipment transportation should be carefully decided to mitigate
the impact to the residents alongside the transportation roads.
7.2 Environment relating law in Iraq
7.2.1 Law of country
(1) Law for air pollution abatement
In the most of country and/or region, the combination of the air quality standards and air
pollutants emission standards is employed for ambient air pollution abatement. However,
there is neither independent air quality standard nor independent air pollutants emission
standard in Iraq at present. The occupational health preservation standards seem to
correspondingly substitute for the air quality standards and the Site Restrictions specified by
Environmental Regulation for Industrial, Agricultural and Service Projects seem to substitute
for air pollutants emission standards in Iraq.
a. Air quality standard
As for air quality, OSHA standard specified by US Occupational Safety & Health
Association is commonly applied in Iraq. However, it should be noted that the exposure
time a day is different between OSHA standard and usual air quality standards such as WHO
(World Health Organization) guidelines. The former basically specifies the exposure time to
be 8 hours a day and the later to be all day long. Accordingly, the maximum acceptable
concentration of air pollutants of OSHA standards is by far higher than that of WHO
guidelines as shown in Table 7.2-1.
Table 7.2-1: Maximum Acceptable Concentration of Pollutants in Air

(mg/m3)
Pollutant Sulfur Nitrogen Particulate Matter
Ozone
Standard Dioxide Dioxide （PM2.5）
OSHA 13 9 5 0.2
WHO 0.125 0.04 0.035 0.16 (8h/d)
(Source: WHO guidelines)
As the pollutants in the air can easily and limitlessly disperse over the borders, the air
pollution is recently considered as worldwide multilateral issues. It will be impossible for Iraq
7-6
to substitute OSHA standards for the most popular WHO guideline. It is recommendable for
project owner, who intends to carry out the project in Iraq hereafter, to employ WHO guideline
or equivalent for air quality management concerning the project.
b. Air pollutants emission standards
There are several methodologies of air pollutants emission standards or guidelines to

regulate the air pollutants mainly emitted from individual combustible facilities in order to
fulfill the ambient air quality specified by the domestic rules or guidelines
- Height of stacks for wider dispersion of flue gas and air pollutants to lower the ground
level concentration of air pollutants
- Limitation of the ground level concentration of air pollutants by individual combustible

facility
- Limitation of sulfur content in fuel to decrease sulfur dioxide emission from

combustible facilities and lower the ground level concentration of air pollutants
- Limitation of air pollutants content in flue gas to decrease air pollutants emission and
lower the ground level concentration of air pollutants
Environmental Regulation for Industrial, Agricultural and Service Projects specifies the
Site Restriction for total 93 types of project in Iraq not to directly or indirectly damage the
public health and environment.
For example, it specifies the Site Restriction for Development Projects of Chemical,
Petrochemical and Oil Industries to be located away from residential zone more than 15 km
in the direction of prevailing wind and at least 10 km in other direction. In case of
Development Projects of Chemical, Petrochemical and Oil Industries which operate small
and medium scale combustible equipment, the air pollutants in flue gas emitted from stack
will sufficiently disperse into air to scarcely damage public health outside Site Restriction or
inside residential zone more than 10 km or 15 km away from the air pollutants emitter.
However, in case of Electric Power Plant, the Site Restriction is specified to be located
away from residential zone more than 8 km in the direction of prevailing wind and at least 6
km in other direction. In case of power stations which operate huge steam boiler, the point
of maximum air pollutants concentration on ground level might possibly be at more than 10
km away from boiler stack. It means that flue gas emitted from boiler stack possibly
damage public health outside Site Restriction or within residential zone.
Thus, Site Restriction specified by Environmental Regulation for Industrial, Agricultural

and Service Projects can not always substitute for air pollutants emission matters. It is
recommendable for project owner, who intends to carry out the project in Iraq hereafter, to
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employ some analytical technologies to check whether Site Restriction is sufficient guard for
air pollutants emission exhausted from planned combustible equipment. For reference, air
pollutants emission guidelines of IFC (International Finance Corporation), which specify the
limit of air pollutants content in the flue gas from stationary emission source are summarized
in Table 7.2-2.
Table 7.2-2: Air Pollutants Emission Guidelines of World Bank 1)
Maximum Allowable Air Pollutant Emission (mg/dry-Nm3) Residual

Fuel
Particulate Matter Sulfur Dioxide Nitrogen Oxides Oxygen (%)
Gas ― ― 320 3
2）
Liquid 50~150 2,000 460 3
2）
Solid 50~150 2,000 650 6
１）
Applicable for combustible equipment with heat input from 3 MWth to 50 MWth
Environmental assessment required for combustion equipment with heat input more than 50 MWt
2）
With environmental assessment, emission can increase up to 150
(Source: Guidelines of International Finance Corporation)
c. Monitoring of air pollution relating matters
Without Air Quality Standards or Air Pollutants Emission Standards at present in Iraq, the
plant operators are not legally required to monitor the air quality relating matters. However,
it is very important to continuously or periodically monitor the air pollution matters i.e. air
pollutants emission condition of combustible equipment and fixed point observation of air
quality for complete management of air quality.
In general, government and/or municipals are fully responsible to manage the whole air
quality matters to completely preserve public health by establishment including air quality
standards and air emission standards. However, there is neither complete air quality
standard nor complete air pollutants emission standard at present in Iraq.
Accordingly, it is recommendable for project owner, who intends to carry out the
industrial project which includes air pollutants emission equipment in Iraq hereafter, to
adequately manage the air quality matters.
As for monitoring of air pollutants emission, the combustible equipment shall be provided
with following continuous analyzers for flue gas.
-Residual Oxygen
-Carbon Monoxide
-Nitrogen Oxide as Nitrogen Dioxide
7-8
-Sulfur Dioxide
-Particulate Matter
The former three analyzers might be utilized for not only air pollutants monitoring but
also combustion control of the equipment.
As for monitoring of ambient air quality, of air quality, periodical fixed point observation
might be recommendable by mobile monitoring station of vehicle provided with following air
pollutant analyzers.
-Carbon Monoxide
-Nitrogen Oxide as Nitrogen Dioxide
-Sulfur Dioxide
Note; Monitoring of Particulate Matter (PM) is intentionally omitted here, because it might be difficult to
separately measure PM by industrial activities from total PM including natural PM in desert condition
of Mid-Western of Iraq. The necessity of PM analyzer should be investigated at the project
implementation stage considering the project site condition.
Because the periodical fixed point observation of atmospheric air quality is carried out in
place of the government and/or municipal, it is recommendable to negotiate with government
and/or municipal to share the total or partial expenditure for it.
(2) Law for water pollution abatement
With abundant water resources of both the Tigris and Euphrates River, the agriculture has
been developed since the ancient era on the land where current Iraq situates. The water
management has been regarded as one of the most important matters in Iraq. Accordingly,
unlike air quality and air pollutants emission matters, the Regulation for Protecting Rivers
No.25 established in 1967 completely specifies the quality of water resources and water
pollution issues by effluents.
a. Water quality standards
Regulation for Protecting Rivers No.25 specifies the limitation of toxic and/ or harmful
material content in the water resources. It specifies that content of major toxic material in
water exceed the value shown in Table 7.2-3 shall be considered harmful.
7-9
Table 7.2-3: Limitation of Toxic Material Content in Water

（mg/l）
Material Limitation Material Limitation
Lead 0.1 Hydrocarbon 0.1
Arsenic 0.05 Free Chlorine Trace
Copper 0.1 Sulfide 0.5
Nickel 0.1 CCl4 5.0
Selenium 0.05 DDT/Org. Chlorides 0.2
Mercury 0.005 Dinitro-Naphthalene 2.0
Cadmium 0.1 Chloro-Benzene 0.1
Zinc 5.0 Trinitro-Toluene 0.5
Chromium 0.1 Dinitro-Benzene 0.5
Cyanides 0.1 Tetranitro-Methane 0.5
Hydrogen Sulfide 0.5 Fluoride 1.0
(Source: Regulation for Protecting Rivers No.25)
The Regulation for Protecting Rivers No.25 established in 1967 classifies the inland water
resources in Iraq into four categories. Table 7.2-4 shows maximum allowable concentration
of major pollution substances in the water resources by the categories. In Mid-Western
region of Iraq, the most of municipals and industries take the water from the Euphrates River
of which quality is classified into Category a-1.
7-10
Table 7.2-4: Water Quality Standard in Iraq

(mg/l)
Category a-1 a-2 a-3 a-4
Creek, water Lakes, ponds
River, Springs,
-course, canal and and other
Pollutants tributaries and wells and
original and gathered
branches ground water
secondary branches waters
PH 6.5~8.5 6.5~8.5 6.5~8.5 ―
Dissolved Oxygen 5< 5< 5< ―
BOD5 <5 <3 <3 ―
Ammonium 1.0 1.0 1.0 ―
Cyanide 0.02 0.02 0.02 0.02
Phenol 0.005 0.005 0.005 0.005
Lead 0.05 0.05 0.05 0.05
Arsenic 0.05 0.05 0.05 0.05
Mercury 0.001 0.001 0.001 0.001
Cadmium 0.005 0.005 0.005 0.005
(Source; Regulation for Protecting Rivers No.25)
b. Effluent standards
As well as water resource classification, the Regulation for Protecting Rivers No.25 also
classifies the effluents into four categories by the destination of the effluent as shown in Table
7.2-5. Some parts of effluent discharged from municipals and/or industries in Mid-Western
region of Iraq might be indispensably returned to the Euphrates River. In such a case,
Environmental Regulations for Industrial, Agricultural and Service Project might be applied.
It prescribes that the effluent drainage point should be at a distance from potable water intake
more than 3 km at upstream and more than 1 km at downstream.
7-11
Table 7.2-5: Effluent Standard in Iraq

(mg/l)
Category b-1 b-2 b-3 b-4
Drainage into Drainage into Drainage into Drainage into
Major Pollutants
water resource public sewage the drainer marshes
Temperature 35℃> 45℃>
PH 6~9.5 6~9.5
Suspended Solid 60> 750>
BOD5 40> 1,000>
COD（K2Cr2O7） 100> ―
Cyanide 0.05> 0.5>
Phenol 0.01~0.05 5~10
Lead 0.1> 0.1>
Arsenic 0.05> 0.05>
Mercury 0.005> 0.001>
Cadmium 0.01> 0.1>
(Source; Regulation for Protecting Rivers No.25)
c. Monitoring of effluent quality
The plant operators who discharge effluents into the water resources in Iraq have to
periodically monitor the quality of the effluents and submit the result of monitoring to the
public authorities.
(3) Industrial waste disposal standard
In Iraq, nontoxic or harmless industrial wastes can be treated as same as municipal garbage.
The major methodology of municipal garbage is the landfill of pans and natural quarries. The
Environmental Regulations for Industrial, Agricultural and Service Project specifies the
necessary condition of landfill of municipal garbage as follows.
- The landfill site has to be located at least 4 km distance away from residential area in
dominant direction of wind and 2 km in other direction.
- The site has to be more than 1 km away from the public roads.
- The landfill site has to be left at least 20 years before utilization. Within this duration,
it is recommended to use the landfill site as green area or car parking and it is not
allowed to build any facilities.
The Environmental Regulations for Industrial, Agricultural and Service Project also
7-12
specifies the necessary condition of landfill of dangerous and poisonous wastes as follows.
- Landfill site for hazardous industrial wastes has to be at long distance away from
residential area. It is recommended to be in the desert.
- Landfill site for hazardous industrial wastes has to be at distance more than 5 km away
from water resources.
- The underground water level at landfill site has to be more than 100 m in depth.
- The soil of landfill site has to be silt and impermeable.
- The depth of landfill has to be less than 4 or 5m.
- The bottom of landfill pan or quarry has to be lined with appropriate materials not to
leak liquid into underground water.
- Minimum 4 closed monitoring well have to be dug to check the underground condition
of landfill site.
- The landfill site has to be left untouched for 30 years not used for any purpose.
- The dangerous or toxic wastes have to be mixed with harmless wastes for landfill.
In Mid-Western of Iraq, the most of the land area consists of deserts with scarce inhabitant
which might be adequate for landfill of wastes. The project owner who intends to carry out the
industrial project in the Mid-Western of Iraq will not be so much suffered from the industrial
wastes disposal whether they are harmful or harmless.
(4) Others
Iraqi Noise Prevention Law established in 1966 specifies the permissive noise level outside
building as shown in Table 7.2-6. The noise level outside buildings specified by Iraqi Noise
Prevention Law specifies the threshold noise level what normal environmental regulation and/or
guidelines specifies. The permissive noise level by the Noise Prevention Law in Iraq is a little
more stringent than that of worldwide applicable standards such as IFC Standards. As the
industrial facilities locate on the area far from residential zone in Iraq, it might be rather easy for
the operators of industrial facilities to meet the noise level specified by the Noise Prevention
Law.
7-13
Table 7.2-6: Noise Level Measurement outside Buildings Measurement Unit dB
Location Noise Level Night Noise Level Morning

1. Hospital & Resting Areas 40 50
2. Resident Area inside City 45 60
3. Resident Area outside City 45 55
4. Hotels 50 55
5. Schools, Nursery, Universities
45 55
and Educational Centers
6. Industrial & Public Areas 65 70
7. Services & Trading Areas 60 65
8. Private Areas: 60 70
a- Airpots
b- Train Stations
c- Ports
9. Educational & Cultural Areas 50 60
10. Tourist Areas 50 60
11. Resident Location inside
45 60
Industrial Areas
(Source: Iraqi Noise Prevention Law)
7.2.2 Local regulations and rules
Through the discussion with local contractors employed for this survey, the survey team did
not encounter the special environmental regulations or rules applied to the project carried out in
Mid-Western district of Iraq. As a result, the survey team understands that there might not be
special environmental rule applied to the project carried out in Mid-Western district of Iraq
where neither biologically precious species nor historical and cultural remains probably exist or
if any, they might be protected by the restriction of industrial project location specified by the
Environmental Regulation for Industrial, Agricultural and Service Projects. Needless to say, if
it is clarified that there are some local rules to be applied to the specific rehabilitation project for
existing industrial facilities, the rules shall be included in the feasibility study as apart of it.
7.2.3 Environmental Impact Assessment
Recently, the project owners in most of countries are legally required to carry out the
Environmental Impact Assessment (EIA) to clarify the influence by project implementation on
health and life of inhabitants, regional society and economy, natural environment and cultural
and historical heritages. If negative impact is predicted through EIA, the project owner has to
establish the countermeasure in order to remove or mitigate the negative impact. The project
owners are required not only to meet the local and/or worldwide common environmental
standards but also to take environmental conservation countermeasure to meet the peculiarity of
the project site.
7-14
As for the project implementation in Iraq where EIA system is not yet legally established,
the project owner is not legally required EIA. However, if the project owner intends to apply
the loan offered by international financial institutes for project implementation which include
the possibility of major environmental impacts, it will have to carry out EIA, because the most
of international financial institution unexceptionally has own implementation and evaluation
program of EIA so that the project might not be disturbed by environmental and/or social issues.
The EIA implementation and evaluation programs of the international financial institutes are
not so much different from each others, rather very much similar, because the purpose of each
EIA is commonly to preserve the inhabitants, society and natural environment from negative
influences brought by the project implementation.
For example, Japan Bank for International Cooperation (JBIC), one of the candidates to
provide the project with loan, requires EIA as a precondition of financing for the projects which
include major environmental impacts. JBIC classifies the projects into 27 categories to clarify
the checkpoints of each category.
Table 7.2-7: JBIC’s Classification of Project
(1) Mining (10) General Manufacturing (19) Water Supply

(2) Oil/Natural Gas (11) Thermal Power (20) Sewage/Wastewater
Development Generation Management
(21) Waste Management
(3) Pipelines (12) Nuclear Power
and Disposal
(13) Hydro Power, Dams and
(4) Iron and Steel (22) River/Channel Project
Reservoir
(5) Nonferrous Metal
(14) Other Electric Generation (23) Irrigation Project
Smelting/Refining
(15) Power Transmission and (24) Agriculture and
(6) Petrochemical
Distribution Livestock Project
(16) Road, Railway and
(7) Petroleum Refining (25) Forestry
Bridge
(8) Paper and Pulp (17) Airport (26) Fishery project
(9) Chemical (27) Other Infrastructure
(18) Port and Harbor
Manufacturing Project
(Source: JBIC’s Clarification of Project)
The list of environmental and social checkpoints for all 27 project categories is shown in the
Table 7.2-8
7-15
Table 7.2-8: Checklist of Environmental and Social impact by Project

No. of Checklist 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27
Mining
Development
Oil and Natural Gas
Pipelines
Iron and Steel
Smelting and Refining

Non-ferrous Metals
Petrochemicals
Petroleum Refining
Paper and Pulp
Manufacturing
Chemical
General Manufacturing
Thermal Power
Nuclear Power
Reservoirs
Hydro Power, Dams and
Generation
Other Electric
Distribution Lines
Power Transmission and
Bridges
Roads, Railways and
Airports
Ports and Harbors
Water Supply
Treatment
Sewage and Wastewater
Disposal
Waste Management and
Projects
River and Channel
Irrigation Projects
Livestock Projects
Agriculture and
Forestry Projects
Fishery Projects
Projects
Other Infrastructure
Natural Resource
Clas 1 Permits
Items Manufacturing Power Generation and Transmission Infrastructure

s
Development
EIA and Environmental
(1) 〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇
Permits
and
(2) Explanation to the Public 〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇

(1) Air Quality 〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇
(2) Water Quality 〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇
2 Mitigation Measures
(3) Waste 〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇
(4) Soil Contamination 〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇
(5) Noise and Vibration 〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇
(6) Subsidence 〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇
(7) Odor 〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇
(8) Sediment 〇
3 Natural Environment
(1) Protected Areas 〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇

(2) Ecosystem and biota 〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇
(3) Hydrology 〇〇〇〇〇〇〇〇〇〇
(4) Topography and Geology 〇〇〇〇〇〇〇〇〇〇〇〇
Management of Abandoned
(5) 〇〇〇
Sites
(1) Resettlement 〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇
(2) Living and Livelihood 〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇
4 Social Environment
(3) Heritage 〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇
(4) Landscape 〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇
Ethnic Minorities and
(5) 〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇
Indigenous Peoples
Working conditions
(6) (including occupational ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
safety)
(1) Impact during construction 〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇
5 Others
Accident Prevention
(2) 〇〇〇〇〇〇〇〇〇〇〇〇〇
Measures
(3) Monitoring 〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇
7-16
These 27 categories are not exclusive ones rather supplementary ones for each other.
Assuming that new phosphate fertilizer plant same scheme to that of existing one in
Al-Qaim-Anbar, Iraq is built, EIA will probably have to cover the checkpoints specified for
following project categories.
Mining
(5) Non-ferrous Metal Smelting and Refining
(9) Chemical Manufacturing
(10) Thermal Power
(16) Road, Railway and Bridge
(19) Water Supply
(21) Waste Management
The project owner who applies loan offered by international financial institute has to finally
submit EIA report to the loan provider for its examination. EIA report shall basically include
following items which come from the World Bank Operational Policy - OP 4.01, Annex B.
‐Executive Summary
Discussing concisely the significant findings and recommended actions.
‐Policy, Legal and Administrative Framework

Discussing the policy and the legal and administrative framework within which the EIA
report is to be carried out.
‐Project Description
Describing the proposed project and its geographic, ecological, social, and temporal context,
including any off-site investments that may be required (e.g., pipelines, access roads, power
plants, water supply, housing, and raw material and product storage facilities). Indicate the
need for any resettlement or social development plan. Normally includes a map showing
the project site and the area affected by the project.
‐Baseline Data
Assessing the dimensions of the study area and describing relevant physical, biological, and
socioeconomic conditions, including all changes anticipated before the project commences.
Additionally, takes into account current and proposed development activities within the
7-17
project area but not directly connected to the project. Data should be relevant to decisions
about the project site, design, operation and mitigation measures; the section indicates the
accuracy, reliability and sources of the data.
‐Environmental Impacts
Predicting and assessing the project’s likely positive and negative impacts, in the most
quantitative terms possible. Identify the mitigation measures and any negative
environmental impacts that cannot be mitigated. Explore the opportunities for
environmental improvement. Identifies and estimates the extent and quality of available
data, essential data gaps, and uncertainties associated with predictions; and specifies topics
that do not require further attention.
‐Analysis of Alternatives
Systematically comparing feasible alternatives to the proposed project site, technology,
design and operation, including the “without project” situation, in terms of their potential
environmental impacts; the feasibility of mitigating these impacts; their capital and recurrent
costs; their suitability under local conditions; and their institutional, training and monitoring
requirements. For each of the alternatives, the analysis quantifies the environmental impacts
to the extent possible, and attaches economic values where feasible. States the basis for
selecting the particular project design proposed and justifies recommended emission levels
and approaches to pollution prevention and abatement.
‐Environmental Management Plan (EMP)

Describing mitigation measures, monitoring and institutional strengthening to be taken during
construction and operation to minimize adverse impacts, offset them, or reduce them to
acceptable levels.
‐Consultation
Record of consultation meetings, including consultations for obtaining the informed views of
the affected people, local Non-governmental Organizations (NGOs) and competent
authorities.
The EIA report is examined using the checklist where key checkpoints of the project are
mentioned. For reference, the checklist for Non-ferrous Metal Smelting and Refining is shown
in Table 7.2-9.
7-18
Table 7.2-10 shows the usual procedure to carry out EIA and Table 7.2-11 the standard
schedule in Japan. In case of seasonal fluctuation of such as tidal current and wind direction, it
sometimes takes more than one year to grasp the environmental situation before project
implementation. Table 7.2-11 shows EIA schedule which take more than one year to clarify
the current environmental situation before project implementation. It shows the case that EIA
takes approximate 4 years. EIA schedule should be carefully studied because it might be one
of the possible critical paths in project implementation.
EIA is generally carried out after basic design of the project has been defined, in other words,
after Front End Engineering and Design (FEED) has been completed.
In case major deviation has been issued from original FEED and subsequent EIA at detailed
design phase, the project owner is required to carry out the EIA again. In general, if the
environmental impacts of the project increase in comparison with original EIA by more than
10 %, the project owner has to carry out EIA again in Japan. In such a case, the project
implementation schedule might completely delay. Accordingly, the project owner has to
carefully and precisely carry out the original EIA.
7-19
Table 7.2-9: EIA Check List for Non-Ferrous Metal Smelting and Refining Project
Confirmation of
Environmental
Category Main Check Items Environmental
Item
Considerations
① Have EIA reports been officially completed?
② Have EIA reports been approved by authorities of the host country’s
government?
(1) EIA and
③ Have EIA reports been unconditionally approved? If conditions are
Environmenta
imposed on the approval of EIA reports, are the conditions satisfied?
l Permits
1 Permits and ④ In addition to the above approvals, have other required environmental
permits been obtained from the appropriate regulatory authorities of
Explanation the host country’s government?
① Are contents of the project and the potential impacts adequately
explained to the public based on appropriate procedures, including
(2) Explanation information disclosure? Is understanding obtained from the public?
to the Public ② Are proper responses made to comments from the public and
regulatory authorities?
① Do air pollutants, such as soot and dust (containing heavy metals,

such as Cu, Fe, As, Cd, Pb, Hg, Zn), and sulfur oxides (SOx) emitted
from the nonferrous smelting processes, including copper, lead and
(1) Air Quality zinc, and the other ancillary facilities comply with the country’s
emission standards? Is there a possibility that air pollutants emitted
from the project will cause areas that do not comply with the country’s
ambient air quality standards?
① Do pollutants, such as SS, heavy metals (Cu, Pb, Cd, Zn, As, Hg), pH
contained in effluents from the smelting processes and other ancillary
facilities comply with the country’s effluent standards? Is there a
(2) Water possibility that the effluents from the project will cause areas that do
Quality not comply with the country’s ambient water quality standards?
2 Mitigation
② Are adequate measures taken to prevent contamination of surface
Measures water and groundwater by these effluents?
① Are wastes, such as slags and sludges generated from copper and
nickel smelting properly treated and disposed of in accordance with
the country’s standards?
② Is red mud (an alkaline waste containing oxides of Al, Si, Fe, Ti, Na,
Ca and others) generated from alumina plant properly treated and
(3) Wastes disposed of in accordance with the country’s standards?
③ Are wastes, such as spent cathodes, dross, and fluxing slags
generated from aluminum smelting processes properly treated and
disposed of in accordance with the country’s standards?
④ Are adequate measures taken to prevent contamination of soil and
groundwater by leachates from the waste disposal sites?
① Has the soil in the project site been contaminated in the past, and are
(4) Soil adequate measures taken prevent soil contamination by leaked
Contamination materials, such as chemical agents?
① Do noise and vibrations comply with the country’s standards?

2 Mitigation (5) Noise and
② Is there a possibility that noise generated by large vehicle traffic for
Vibration transportation of materials, such as raw materials will cause impacts?
Measures
① In the case of extraction of a large volume of groundwater, is there a
(6) Subsidence possibility that the extraction of groundwater will cause subsidence?
① Are there any odor sources? Are adequate odor control measures
(7) Odor
taken?
7-20
① Is the project site located in protected areas designated by the

(1) Protected
country’s laws or international treaties and conventions? Is there a
Areas possibility that the project will affect the protected areas?
① Does the project site encompass primeval forests, tropical rain forests,
ecologically valuable habitats (e.g., coral reefs, mangroves, or tidal
flats)?
② Does the project site encompass the protected habitats of endangered
3 Natural species designated by the country’s laws or international treaties and
Environment conventions?
(2) Ecosystem
③ If significant ecological impacts are anticipated, are adequate
and biota
protection measures taken to reduce the impacts on the ecosystem?
④ Is there a possibility that the amount of water (e.g., surface water,
groundwater) used by the project will adversely affect aquatic
environments, such as rivers? Are adequate measures taken to
reduce the impacts on aquatic environments, such as aquatic
organisms?
① Is involuntary resettlement caused by project implementation? If
involuntary resettlement is caused, are efforts made to minimize the
impacts caused by the resettlement?
② Is adequate explanation on relocation and compensation given to
affected persons prior to resettlement?
③ Is the resettlement plan, including proper compensation, restoration of
livelihoods and living standards developed based on socioeconomic
studies on resettlement?
(1) Resettlement ④ Does the resettlement plan pay particular attention to vulnerable
groups or persons, including women, children, the elderly, people
below the poverty line, ethnic minorities, and indigenous peoples?
⑤ Are agreements with the affected persons obtained prior to
resettlement?
⑥ Is the organizational framework established to properly implement
resettlement? Are the capacity and budget secured to implement the
plan?
4 Social
⑦ Is a plan developed to monitor the impacts of resettlement?
Environment ① Is there a possibility that the project will adversely affect the living
conditions of inhabitants? Are adequate measures considered to
reduce the impacts, if necessary?
② Is there a possibility that large vehicle traffic for transportation of
(2) Living and materials, such as raw materials and products will cause impacts on
Livelihood traffic in the surrounding areas, impede the movement of inhabitants,
and cause risks to pedestrians?
③ Is there a possibility that the amount of water used (e.g., surface water,
groundwater) by the project will adversely affect the existing water
uses and water area uses?
① Is there a possibility that the project will damage the local
archeological, historical, cultural, and religious heritage sites? Are
(3) Heritage
adequate measures considered to protect these sites in accordance
with the country’s laws?
① Is there a possibility that the project will adversely affect the local
(4) Landscape landscape? Are necessary measures taken?
7-21
① Is the project proponent not violating any laws and ordinances

associated with the working conditions of the country which the project
proponent should observe in the project?
② Are tangible safety considerations in place for individuals involved in
the project, such as the installation of safety equipment which prevents
industrial accidents, and management of hazardous materials?
4 Social (5) working
③ Are intangible measures being planned and implemented for
Environment conditions individuals involved in the project, such as the establishment of a
safety and health program, and safety training (including traffic safety
and public sanitation) for workers etc.?
④ Are appropriate measures being taken to ensure that security guards
involved in the project do not violate safety of other individuals
involved, or local residents?
① Are adequate measures considered to reduce impacts during

construction (e.g., noise, vibrations, turbid water, dust, exhaust gases,
(1) Impacts and wastes)?
5 Others during ② If construction activities adversely affect the natural environment
Construction (ecosystem), are adequate measures considered to reduce impacts?
③ If construction activities adversely affect the social environment, are
adequate measures considered to reduce impacts?
① Are adequate accident prevention plans and mitigation measures
developed to cover both the soft and hard aspects of the project, such
as establishment of safety rules, installation of prevention facilities and
(2) Accident equipment, and safety education for workers? Are adequate
Prevention measures for emergency response to accidental events considered?
Measures ② Are adequate accident prevention measures (e.g., installation of
prevention facilities and equipment and establishment of prevention
management framework) taken for storage, loading/unloading, and
transportation of hazardous and dangerous materials?
5 Others ① Does the proponent develop and implement monitoring program for
the environmental items that are considered to have potential impacts?
② Are the items, methods and frequencies included in the monitoring
program judged to be appropriate?
③ Does the proponent establish an adequate monitoring framework
(3) Monitoring
(organization, personnel, equipment, and adequate budget to sustain
the monitoring framework)?
④ Are any regulatory requirements pertaining to the monitoring report
system identified, such as the format and frequency of reports from the
proponent to the regulatory authorities?
① Where necessary, pertinent items described in the Mining checklist
should also be checked (e.g., projects including mine development).
② Where necessary, pertinent items described in the Ports and Harbors
Reference to checklist should also be checked (e.g., projects including construction
Checklist of of ports and harbor facilities).
Other Sectors ③ Where necessary, pertinent items described in the Thermal Power
6 Note checklist should also be checked (e.g., projects including construction
of large-scale power plants used for smelting plants, such as
aluminum smelters).
① If necessary, the impacts to transboundary or global issues should be

Note on Using
confirmed (e.g., the project includes factors that may cause problems,
Environmental
such as transboundary waste treatment, acid rain, destruction of the
Checklist ozone layer, and global warming).
1) Regarding the term “Country’s Standards” mentioned in the above table, in the event that environmental standards in the
7-22
country where the project is located diverge significantly from the World Bank Safeguard Policy as a general rule, or the
International Finance Corporation Performance Standards for private sector limited or non-recourse project finance cases, or
other standards established by other international financial institutions, or other internationally recognized standards or good
practices established by developed countries such as Japan regarding environmental and social considerations, the background
and rationale for this deviation, and the measures to rectify it if necessary, are to be confirmed. In cases where local
environmental regulations are yet to be established in some areas, considerations should be based on comparisons with
international standards such as the World Bank Safeguard Policy, and appropriate standards of other countries(including
Japan).
2) Environmental checklist provides general environmental items to be checked. It may be necessary to add or delete an item
taking into account the characteristics of the project and the particular circumstances of the country and locality in which it is
located.
7-23
Table 7.2-10: Japanese EIA Procedure
National Local
EIA-Related Tasks / Party in charge Proponent Citizens Remarks
Government Government
1. EIA Methodology (scoping) Document
Preparation of EIA Work Plan ◯
Consultation on the Work Plan ◯ ◯ ◯

Drafting/examination of Scoping
◯ △ △
Document
The public
Public announcement &
◯ △ announcement/inspection
inspection
period lasts 1 month.
Within 2 weeks after the
Submission of written opinions △ ◯
public inspection period
Distillation of opinions, possible Within 90 days after the
examination Distilled Opinions & ◯ △ △ submission
Possible Responses
2．Environmental Impact Statement (EIS) Draft
Present Status Survey In case of seasonal
fluctuation, survey
◯
throughout the year is
required
Forecast assessment ◯
Preparation of EIS
◯
Draft/Executive Summary
Consultation on EIS
◯ ◯ ◯
Draft/Executive Summary
Public announcement, inspection The public
& hearing ◯ △ announcement/inspection
period lasts 1 month.
Submission of written opinions Within 2 weeks after the
△ ◯
public inspection period
Distillation of opinions, possible Within 120 days after the
responses, of Distilled Opinions & ◯ △ △ submission examination
Possible Responses
3. Environmental Impact Statement (EIS)
Preparation of EIS/Executive
◯
Summary
Examination/revision of
◯ △
EIS/Executive Summary
Public announcement &
◯
inspection
◯: Active party △: Passive party (including examiner)
7-24
Table 7.2-11: Example of EIA Schedule

Time period Year-1 Year-2 Year-3 Year-4 Year-5 Remarks
EIA-related tasks 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Preparation of EIA Work Plan

Preparation of Scoping Document
EIA Scoping
Consultation on Scoping Document

Public announcement & inspection
Submission of written opinions
Distillation of opinions, possible responses,

examination
Present status survey Examples of present status surveys

throughout the year
Forecast assessment
Preparation of EIS Draft/Executive Summary
EIS Draft
Consultation on EIS Draft/Executive Summary
Public announcement, inspection & hearing
Submission of written opinions

Distillation of opinions, possible responses,
examination
Preparation of EIS/Executive Summary

EIS
Examination/revision of EIS/Executive Summary
Public announcement & inspection
7-25
7.3 Requirement of environmental protection in expected project area
Because of following reasons, the industrial rehabilitation projects of existing facilities to be

carried out in Mid-Western of Iraq will not bring serious environmental or social issues to the
surrounding area of the projects.
- The industrial facilities have to be located on the area far from residential zone to meet
the specification of Environmental Regulation for Industrial, Agricultural and Service
Projects.
- The density of industrial activities is not so high in Mid-Western district of Iraq that the
integrated air or water pollution by plural facilities will not easily emerge.
- There is abundant unoccupied desert area in Mid-Western of Iraq which can be utilized
for landfill of industrial wastes not to bring nuisance to neighboring inhabitants and
society.
- There is probably neither biologically precious species nor historical and cultural remains
to be paid protective consideration near the industrial area in Mid-Western district of Iraq.
Thus, the survey team has attained to a result that the industrial rehabilitation projects of
existing facilities in Mid-Western of Iraq will not require special environmental
countermeasures.
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Chapter 8
Conclusion and Recommendations

8.1 Macroscopic Observations
The sector study was carried out to cover the major three industries under MIM, and the
depth of study on chemical fertilizers industry was relatively deeper than other two industries.
It was derived mainly because the target in this sector study was preset to highlight the
“Phosphate Fertilizers Production Industry”.
Under the above background the brief study result on major industries is summarized as
follows:
8.1.1 Current Status of MIM Sector in IRAQ
The all industrial production companies under MIM are “State-Owned Enterprises (SOEs)”
and are categorized into the following six sectors as shown in the table.
These industries were very vibrant and competitive in the past and also were growing
constantly. However due to the political and economical situation which came up in the late
1980s and had continued up to the turn of the century, these industries had badly been affected.
Some of them had seriously deteriorated.
Table 8.1-1: MIM Sectors & SOEs
Nos. of Plants & Factories

Nos. of Total
Industrial Sectors Operational Non-Operational
SOEs Total Employees
Factories Factories
Engineering 21 99 67 12 56,217
Construction 8 45 27 10 31,481
Chemical & Petrochemical 15 48 34 11 33,009
Food & Pharmaceutical 6 21 15 5 23,717
Textiles 8 34 32 2 34,925
Industrial Services 9 4 1 0 6,243
Total 67 251 176 40 185,602
(Source: ”IRAQ : OPEN FOR BUSINESS 2010” (Investment Guidebook) prepared by MIM)
The following politically and economically difficult conditions have caused the most
industries to the status which makes them economically less feasible to continue with their
industrial activities;
8-1
Negative Factors
¾ Lack of investments,
¾ Lack of imported raw materials,
¾ Lack of spare parts and component,
¾ Lack of equipment and machineries
¾ Lack of industrial materials, such as steel pipes & tubes etc.,
¾ Lack of other needed commodities
¾ Economic sanctions for 13 years
Such downfall in all industrial activities caused the chaotic situation in all industries.
It is reported that consequently a wide looting deed of materials, machinery, equipment,

industrial commodities had occurred frequently at any factory and plant.
Meantime process of “Privatization of all Iraqi SOEs” started in 2004, and a process of
“Leasing of SOEs” was also offered by MIM to the private sector.
However it was successful in very few locations due to the following reasons:
* Security problem
* Excessive employment by SOEs
Consequently “Rehabilitation Strategy” has come up with the financing structure of

Governmental Budget Allocation, ODA Loans and Grants from donating countries.
8.1.2 Cement Industry
The cement industry is one of the oldest industries in Iraq. In 1936 the first plant was
established in Baghdad by the Iraqi private sector and its production was started in 1949.
In 1966, however, the Government announced the nationalization of cement industry, and
under such new strategy and policy, many cement plants were constructed through out the
country.
In 1980 ~ 1981, MIM decided the large expansion of cement production capacity from 7
million tons per annum to 21 million tons per annum.
Since then, many plants were constructed, but its production volume in cement industry has
become declined due to lack of investments, spare parts and industrial management capability in
the past twenty (20) years.
Today many of such plants including their distribution facilities have been listed up as
rehabilitation factories from Iraqi State Company for Cement, State Company for Northern
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Cement and State Company for Southern Cement.
If these plants with design capacity of 14 million tons per annum plus 2 million tons per
annum in Kurdistan will be rehabilitated, the 10 million tons per annum production capacity
could be attainable and meet the local demand.
Currently production volume seems to be around 4 million tons per annum plus production
from Tasluja plant in Kurdistan region. Then the gap between local demand and local
production has been made up with the imported cement, which is dealt by private sector in
100%.
Meanwhile some of plants have been leased to private investors, who were requested to be
rehabilitated as follows:
y Tasluja plant : Rehabilitation was already done by French company.
y Al-Qaim plant : Already leased to an Iraqi private investor and now producing around
2,200 tons/day. (726,000 tons/year)
y Kubaisa plant : Now in the process of leasing to Iraqi private investor.

Currently producing 300,000 tons/year against the design capacity of
2 million tons/year.
8.1.3 Glass & Ceramic Industry
The glass and ceramic industry is one of the oldest industrial establishments in Al-Anbar
Governorate.
The first production was started in 1970 in Ramadi, capital city of the province.
Current production status of “State Company for Glass & Ceramic Industry” is as follows:
* Production start in 1971 in Ramadi in Anbar province
* Major products and current production status are shown in the following table:
* Iraqi market has great demand for the above products, and particularly the sheet glass for
housings which have been planned to construct 1.5 million houses.
As per the above table, all of the production lines are serious damaged and deteriorated in its
production capacity.
When considering Iraqi Housing Plan, item 1~4 facilitates should be rehabilitated and/or
scrapped and built.
8-3
Table 8.1-2: Glass & Ceramic Products and Production Volume
Design Actual Capa. in Rehabilitation

Name of Plant Major Products
Capacity (t/y) 2008 (t/y) Target (%)
1. Ceramic Floor Tile 31 x 31 cm Tile 20,790 460 35,640
Sink wash, Toilet basin
2. Sanitary Ware 5,000 60 4,224
with accessories
Ceramic wall tile
3. Wall Tile 24,750 Stopped 39,600
30 x 20 & 40 x 40cm
3~6 m/m x 220 x 200cm 31,680
4. Sheet Glass 39,600 Stopped
3~6 m/m x 190 x 180cm (80%)
All kinds of glass bottles
5. Bottles & Jars 79,200 32 63,360
and jars
All kind of glass table
6. Table ware 24,750 Stopped 19,800
wares
7. Medical bottles 25-125 ml size 39,600 Stopped 31,680
8.1.4 Chemical Fertilizer Industry
There are two Ammonia/Urea Plants and one compound fertilizer plants in Iraq.
* Fertilizer Complex at Baiji:
A Plant which was commissioned in 1990.
It has a design capacity of:
- Ammonia: 1,000 tons/day
- Urea: 1,250 ton/day
Marubeni Corporation is rehabilitating the complex for the time being.
* Fertilizer Complex at Khor-Alzubair:
The plant was commissioned in 1977
It consists of 2 lines with a design capacity of 3,200 tons/day Urea.
Now the Plants have been under rehabilitation with Japanese ODA loan.
* The SCP Complex in Al-Qaim which this survey has been focusing on, needs also
complete rehabilitation.
Further to the above, Abu Al-Khasib Chemical Fertilizer plant in Basrah province could not
be rehabilitated since it was seriously damaged during the First Gulf War, and therefore many
8-4
equipment and machineries were removed from the site to be used in other plant sites.
Local demand figures these chemical fertilizers are not found in any statistical data, and
only current production data are available as precisely stated in Chapter 5.
Then actual demand, not potential demand is limited by supply-side volume, which have
given the greatly negative affection on Agriculture Industry.
Many farmers abandoned their farming due to the following reasons and conditions:
* Stoppage of irrigation systems
* Lack of electric power for motor-driven pumps
* Economical sanctions
* Security problems
Under the circumstances surrounding the farming activities in agricultural industry, all
figures for chemical fertilizer demands, even if available, seem to be hypothetical ones and do
not have a solid base for such estimation.
According to the local information of Iraqi farm land conditions Study Team’s local partner
have conducted the need of different chemical fertilizers as followings, but these do not
represent the real local demand:
Urea : Approx. 1 million t/y
NP & NPK : Approx. 1.25 million t/y
TSP : Approx. 0.6 million t/y
As per Study Team study in the manner of document reviews and verbal information, we
have assumed that the following vicious cycle has happened to occur in regards to agriculture
and fertilizers, and it is envisaged that this vicious cycle was formed by many complicated
factors.
Typical factors, some of many complicated factor are indicated in the flowchart.
8-5
3 times Wars
Damages on Social & Industrial

Economic Sanctions
Infrastructure
No Spare parts & No

Electricity Supply Can not repairing work due to Plant Deterioration
replacement of
Problem no Spare parts Low suppliability
Equipment, Machineries
Necessity to restore
Vicious Circle
Production capacity of the
Plant
Irrigation System Abandonment from Chemical Fertilizers

Not work farming Limitation of Supply
Short fall of Foodstuff Financing Arrangement

Investment, Lease
ODA Loans & Grant
Foodstuff ODA Import of Foodstuff
Completion of
Continuing of Import of Rehabilitation of the
Foodstuff Plants
Self-sufficiency of
Basic Foodstuff
Figure 8.1-1: Assumed Vicious Cycle of Industrial Activities

(Source: Compiled by Study Team based on SCP data)
As shown in the above Block Flow Diagram, the restoration of fertilizers facilities in
production capacity in any way is the most important to improve each yield of crops.
In this regard the good balance of N.P. K fertilizers is absolutely required together with the
required quantity of them and irrigation water.
From the volumetric point of view, restoration of fertilizer facilities is priority issue.
8-6
8.2 Microscopic Observation of Phosphate Fertilizer Industry
8.2.1 Feedstock of Phosphate Rock
The large deposits of Phosphate rock was found in 1960s and the proven reserves are around
500~700 million tons, concentrated in Iraqi’s western desert, in the region of Akashat.
The mine is located about 150 km to the south-west of the Al-Qaim city and one shift
operation capacity is designed to be 3.4 million tons per year.
P-rock quality is good with average concentration of 22% (around between 21 – 23%
concentration of P2O5).
8.2.2 Current Operating Conditions
(1) Akashat Mine
1) Present operational situation
In general there are not so much sophisticated equipment existed and partially operated at
low load factor (Ave. 600,000 tons/3,400,000 tons per year)
Major reasons for low production profile seem to be as follows:
* Performance draw back of Chemical plants in Al-Qaim (Low demand of feedstock)
* Mining equipment are working under not good condition due to no spare parts and
poor maintenance activities
2) Utilities
Power and water supply has enough capacity and meet current demand of the mining
facilities and housing complex, however power failure seems to have occurred very often.
Elec. power supply : High tension 132 KV lines from Al-Qaim plant
Power consumption : It is below 7 MWH at mine facilities
3) Needed rehabilitation
Necessity of Rehabilitation is anticipated for the following equipment and system:
- Production equipment : To be partly replaced with new mining equipment, such as

Bulldozer, Excavator, Power Shovel and Drilling Rig.
- Utilities supply system : Currently no need to rehabilitate largely subject to minor
repairing and remedial work to be done
- Civil Infrastructure : There may be not serious.
8-7
- Transportation System : Railway seems to have no serious defects.

Operation management system might have potentially
inferior aspects to be improved and/or upgraded.
Traffic control system seems to have had the damages, then
the existing control system could be necessary to be restored.
(2) Compound Fertilizers Complex (SCP in Al-Qaim)

1) Present operational situation
-1. General remarks
Generally speaking the external appearances of the existing production facilities are not
good, under the limited judging materials of the photographs of each plant and its
equipment, piling system, tank and structures.
Internal conditions of equipment and piping system are not ascertained. Accordingly, at
next investigation stage, more concrete survey shall be required. “Action Flowchart for
Materialization of Rehabilitation Project” attached hereinafter shows its necessity.
-2. Plant-wise condition
Sulfuric acid plant is currently working with 20% of the design capacity due to multiple
technical and process problems.
* Phosphoric acid plant is currently working with approx. 23% of the design capacity due
to the aging deterioration of equipment (deterioration) and no spare parts & no
replaceable equipment.
* Phosphate fertilizer production plant, especially, TSP plant is currently working with
approx. 40% of the design capacity due to the less supply of phosphoric acid due to
obsolescent equipment, and no spare parts & equipment.
* Compound fertilizers (NP and NPK) plants are currently working also at low
production rate (40%) for the design capacity due to the lack of ammonia and urea as
feedstock.
* Mono-Ammonium Phosphate (MAP) fertilizer plant is not working well due to the lack
of ammonia.
MAP is one of raw materials in production of compound fertilizers.
* Ammonia plant is completely stopped due to the damage of multi-purpose compressor

and aging problems of major equipment.
Ammonia production unit (Unit 451) should be replaced with new one, however the
same capacity unit as the existing one is not recommendable.
8-8
SCP has desired to construct a new ammonia plant with the capacity of 1,000 t/d and
1,500 t/d urea production.
* Utilities facilities meet the demand of Compound fertilizers plants except the instability
of electricity supply.
2) Common problems to all facilities
- Instability of the electricity supply
- No spare parts
- No spare equipment
- No reparing materials available
Further to the above production facilities, the products packing and loading facilities
could be also rehabilitated. Currently unpacked products are shipped out.
At this moment it is not clear about the supply ability of paper sacks for compound
fertilizers.
Overall productivity of a whole facilities are estimated to be the plant utilization ratio of
around 15% of the designed capacity due to the above several reasons.
From the technical viewpoints, it is rather recommendable to properly judge what is
better solution to the restoration of production capacity, such as rehabilitation of the
existing seriously-damaged, deteriorated and de-graded plants or new construction of
complete plants.
8.3 Conclusions
Study Team has conducted the following conclusions:
* Almost all of the SOEs under MIM are necessary to be modernized and restored through
the rehabilitation projects in order to meet the local demand for industrial products.
(1) Construction sector

Particularly the rehabilitation of construction sector is priority issues for the purpose of
improvement in supply conditions for the reconstruction of social and industrial infrastructures.
(2) Cement sector

Potential demand of cement in Iraq is assumed to be approximately 15 million tons/year and
actual supply was reported to be 6 million tons/year including imported cement. The
long-term demand forecast indicates 30 million tons in 2030, therefore cement production
facilities should be urgently rehabilitated.
8-9
(3) Glass sector

Government has launched the big housing complex plan to newly construct 1.5 million
houses, therefore sheet glass production facility should be re-constructed.
However now it is under rehabilitation at Government budget of 18 million dollars with

modern production process (old one: by the “FSU Techno export”) in the manner of upgrading
is both production capacity from 30 t/d to 120 t/d and product quality.
This information was conveyed by local partner, not by Iraqi mission, then it is not sure
whether the above rehabilitation works cover the full range of necessary rehabilitation or not.
8.4 Recommendations
8.4.1 General remarks
In this sector study Chemical Fertilizer Industry in Al-Anbar Governorate (SCP) has been
relatively focused on the investigation of necessity of “Rehabilitation Project” among other
industries belonging to MIM.
Then in this clause, the projects related to SCP Complex are stated with Study Team’s
recommendation.
When focusing on the specific project of “Rehabilitation Project of SCP Complex in

Al-Qaim”, further detailed study is needed to justify the necessity of the project, its project cost
and schedule, including “Project Execution Plan”, which will indicate rehabilitation of the
existing facilities or new construction of complex at different location.
* Final project scenario will be pictured at the next detailed Feasibility Study stage.
Regarding to “Chemical Fertilizers Industry” in Al-Anbar, in Mid-Western District of Iraq,

State Company of Phosphate (SCP) is only one production company to supply compound
fertilizers of N.P.K and its raw material of MAP.
This SCP is also only one production company of compound fertilizers in Iraq, therefore
the supply-ability of required volume of P-fertilizers definitely depends on the SCP
complex.
In this connection, the restoration of production capacity of SCP Complex in Al-Qaim is

urgent and essential as well as reconstruction of irrigation system for the urgent recovery
of self-sufficiency of basic foodstuff.
8.4.2 Verification of the necessity of rehabilitation project of SCP
Before getting into such Detailed F/S、the importance of the rehabilitation project of SCP
8-10
Complex in Al-Qaim was recognized by the Iraqi Mission. Responding to Study Team’s
questionnaires, the Iraqi side’s considerations were expressed as below;
(1) Why SCP Complex Rehabilitation is priority project among other major industries in
Al-Anbar?
1) Reasons assumed by Study Team Yes/No

z The improvement of “Food situation” is politically urgent issue! □/□
(from Central Government point of view and from Provincial Government point of view)
z SCP has enough market for additional production level after rehabilitations! □/□
(Classified in MIM privatization program)
z SCP / Al-Qaim project is listed as the most urgent target (Glass & Ceramic industry is □/□
also listed in!)
z To solve the problem of unemployment! (Especially in really remote area of Al-Qaim) □/□
2) Reasons expected by Iraqi side for applying Japanese ODA Loan Yes/No
z SCP rehabilitation cost is relatively higher than other two industries rehabilitation cost. □/□
z Rather difficult to execute the rehabilitation SCP Al-Qaim Complex in the manner of □/□
Investment by domestic and foreign private enterprises !
z Expectation for modernization of the facilities by Japanese Companies ! □/□
(2) Methodologies of Modernization of SCP Complex

Clarification of Execution Plan Comments by Iraqi Mission
1. Is there any possibility of modernization in other There is no possibility to newly construct
location ? phosphate fertilizers complex outside the
(ex) Outside Al-Qaim Complex site, existing Al-Qaim complex area.
such as:
(1) Other place close to Akashat Mine
(2) New site adjacent to New Gas Field
(Akass)
2. Is there any problem in case of rehabilitation at Technically no problem in the case of
the same location of each existing unit ? rehabilitation of the existing facilities inside
Al-Qaim complex site.
3. During the rehabilitation works, Al-Qaim - It should be considered demand peak of
Complex may be forced to completely stop the P-Fertilizers might be limited to be in winter
production. What is your idea to overcome such season (max. three months).
situation? - Possible solution will be stock piling or
alternatively import.
(Observasion)
1) Rehabilitation in Al-Qaim is possible and practical due to enough numbers of

maintenance staff available, such as around 800 persons and other technical staff plus
operation engineers.
8-11
2) In Akashat area there are not available of construction workers and it is difficult to
gather them from outside Al-Qaim area due to no life infrastructure.
3) In Akaz area almost the same situation as in Akashat is anticipated.
4) From the employment point of view, at present, about 4,000 people are working at
Al-Qaim Complex, that figure is larger than for the full production of Complex.
Anyhow, these amount of people should always be employed because of the relief
measures for the unemployed. Therefore, even after the completion of the
rehabilitation, these level of working people will have to be employed. This is an
essential issue from the viewpoint of employment in Al-Qaim area.
(3) Restoration of Al-Qaim complex v.s. New construction
What are the prevailing conditions of restoring Al-Qaim Complex over building new
complex at other location?
1. Economical condition:
2. Existing utility supply facility availability (Water/Electricity/etc.):

order
3. Existing wastes handling facility availability (Gypsum/Waste water/etc.)

effective.
4. Existing infra-structure (Road/Railway/etc.)

5. Work force availability (for operation/maintenance)

SCP Al-Qaim has kept enough manpower to execute the project. If in other location it is
more difficult to obtain workforce and it will be more costly.
6. Feedstock delivery conditions (other than phosphate rock)

7. Other conditions / restrictions, if any.

Accordingly to the above clarification it was recognized that SCP in Al-Qaim has taken the
8-12
possible maintenance actions at minimum level in the way of national budget allocation, then
they have considered that the rehabilitation of the existing facilities is the shortest way to
materialize the restoration of production capacity.
(4) Why you need urgent rehabilitation of SCP Complex?
1) Factors Analysis in Encouragement Policies of Agriculture
Facts Policy Matters Result
Higher ratio of
opulation
Rise of Necessity for Building-up of Self-
increase (3%/year) Spread of Agri-
Urgent Sufficiency of
products to each
Encouragement of Agricultural Products
family
Agriculture
Food Shortage Food Aid by International
Organization
[Forecast]
2 million tons for coming 6
months, Establishment of
equivalent to 1.7 Billion$ Distribution
Urgent Supply of Supply of Networks
Restoration Required Good Kind (Logistic Infra.)
of Irrigation Quantity of of Storage Facilities
System Fertilizer Seeds Shipment
Facilities
Plan and Execution
Figure 8.4-1: Factors Analysis

(Source: Compiled by the Study Team)
2) Historical Change of Agricultural Policies
¾Upto 1980 : Inconsistent agricultural policies under Hussein Government discouraged

domestic market production. Despite its abundant land and water
resources, Iraq was a net food importer.
Under the “UN Oil for Food” program, Iraq imported large quantities of
grains, meat, poultry and dairy products.
¾1981 : The Government abolished its farm collectivization program, allowing a
greater role for private enterprises in agriculture.
¾1997 : The International “Oil-for-Food” program (1997-2003) further reduced
farm production by supplying artificially-priced foreign foodstuffs.
¾2003 : The military action of 2003 did little damage to Iraq agriculture.
Favorable weather conditions in 2003 led to produce grain 22% higher
than in 2002.
¾2004 : The growth of grain production continued, but Iraq was an importer of
agricultural products. It was predicted to continue for the foreseeable
future.
Iraqi Government has seriously planned to get out of the difficult position of an importer of
8-13
agricultural products by encouraging agricultural industry.
3) Current Solutions for “Plan & Execution required in Agricultural Sector”
¾Baiji Fertilizers Complex : - Spare parts were purchased with USAID of 5 million US$
- Under rehabilitation by a domestic private company
under the corporation with Marubeni Corporation
¾Khor Al Zubair SCF/South : Under rehabilitation in the manner of Japanese ODA Loans
(18,100,000,000 JPY ≒ 200 million US$)
¾Al-Qaim SCP Complex : Planned “Rehabilitation in the manner of Investment by
Private Enterprise. However, so far, not materialized yet
due to no local and foreign investors are interested in the
plan.
4) Statistical Analysis of P-Fertilizers Consumption
¾ Comparison between Iraq and other countries and areas
Table 8.4-1: Comparison of P-Fertilizers Consumption by “INDEX”

Area and Country N-Fertilizers P-Fertilizers K-Fertilizers Grand Total
85,500 33,800 23,600
World Total 142,900
(1.00) (0.39) (0.28)
America Total 15,900.5 7,898.8 8,270.7
32,070
(N.C.S. America) (1.00) (0.49) (0.52)
10,876.5 3,321.1 3,888.9
Europe 18,077.5
(1.00) (0.31) (0.36)
2,893 1,059.3 248
Middle East 4,200.3
(1.00) (0.37) (0.08)
884.2 305.5 101.7
Iran 1,291.4
(1.00) (0.42) (0.11)
510.7 127.4 0.7
Iraq 638.8
(1.00) (0.25) (0.0014)
<Observation>
(1) The ratio of P-Fertilizers against N-Fertilizers in Iraq is too small in comparison
with ones of Iran, America total and world total.
(2) When considering weather and soil nature, P/N ratio of Iraq should be close to the
figure of Middle East at least.
(3) As per table 8.4-1 the consumption ratio of N:P=1:0.4 is the minimum average
(World total 1:0.39), then the ratio in Iraq should be upgraded first from 0.25 to
around 0.4 and secondary conditions to improve the yield of the crops is to lift up
the production level of N-P fertilizers to the level of N-Fertilizer plants design
8-14
capacities and P-Fertilizer plants design capacities.

For the increase of N. P. K compound fertilizers production, N & P production (K
is imported from Jordan) are essential.
¾ Comparison of Specific Consumption (per ha) P-Fertilizers in Iraq and other countries
and areas
Table 8.4-2: Country-wise Fertilizers Specific Consumption/Ha

Agricultural Field Fertilizers Consumption (tons/ha)
(x Million ha) N-Fertilizers P-Fertilizers K-Fertilizers
Iraq 5.7 0.089 0.022 0.00012
Egypt 3.5 0.305 0.041 0.016
Iran 18.1 0.049 0.017 0.006
Saudi Arabia 3.8 0.059 0.035 0.006
Syria 5.5 N.A. N.A. N.A.
Brazil 50.7 0.036 0.055 0.060
USA 187.8 0.058 0.021 0.024
France 19.5 0.117 0.037 0.049
UK 5.9
According to the above factors analysis of the necessity of urgent rehabilitation of

Al-Qaim SCP Complex, the further detailed study must be recommendable.
Through such further detailed study, the project definition will be established.
8.5 Way Forward
8.5.1 Information to be collected for the restoration of phosphate fertilizer industry
For the improvement of the survey results, study team tried to collect many kinds of data
and information. Especially, in the case of forecasting the phosphate fertilizer demand in Iraqi,
followings are urgently needed;
1. Verification of soil quality of cultivated land in Iraq
2. What type of crops are cultivated, actually in what regions and how many amount of
phosphate fertilizers are needed there.
3. Alternative uses of other fertilizers in the case of shortage of phosphate fertilizers.
4. Forecasted export amount of phosphate fertilizers.
5. Introduction of some typical demand forecast data in Iraq.
8-15
Unfortunately, however, study team could not find these suitable data mentioned above.
8.5.2 Information to be collected for materializing the rehabilitation proposal by

Japanese ODA loan
The following page show the “Way Forward” until the completion of the “Project Plan”
including “Diagnoses of the Facilities”, which will be possibly executed in parallel with D-F/S
and/or as a part of D-F/S.
As the last message to MIM, the following items to be clarified by MIM in accordance with
“JICA Operational Guidance for Japanese ODA Loan”.
For further consideration proceeding with current plan (rehabilitation of Al-Qaim or new
construction of ammonia/urea) by Japanese ODA Loan, the following items (example) should
be clarified by MIM so that JICA could judge reasonableness of providing Japanese ODA Loan.
(JICA operational guidance: http://www.jica.go.jp/english/operations/schemes/oda_loans/oda_op_info/guidance/)
• Current activity of MIM in the Chemical Fertilizer industry (ex. progress of

rehabilitation project of the ammonia/urea plant in Baiji)
• Study of the possibility of new construction of Phosphate Fertilizer complex (in Al-Qaim
or other area)
• In case of the rehabilitation of Al-Qaim complex, re-study of the realistic rehabilitation

plan (Recovery up to production rate of 90% is realistic?)
• In case of the rehabilitation of Al-Qaim complex, priority of units to be urgently

rehabilitated
• Re-study of necessary cost for rehabilitation plan
• Study by MIM of market demand of Phosphate Fertilizer in Iraq
• MIM’s action plan for current policy of Chemical Fertilizer
• Condition of sublet from MIM to SCP
• Expected technical cooperation (management, operation skill,,,,)
• In case of the construction on an ammonia/urea plant in Anbar, relation in plants in Baiji

and Basrah?
8-16
8.6 Auxiliary Support to Rehabilitation Project of SCP Complex
If SCP Complex rehabilitation project could be materialized, the following additional

supports are quite essential and effective for smooth execution of the project. This support will
be needed for the stable operation and maintenance of the facilities after the completion of the
rehabilitation.
* Special support with the supply of inspection equipment and tools for diagnosis of the
internal and external of existing facilities, including training at vendors.
* The introduction of DCS (Distributed Control System) is strongly desired for Al-Qaim
Complex, so that special technical training of DCS is preferable prior to the installation in
Complex.
Because DCS will be supplied by Supply Contractor however the piping and
instrumentation works shall be locally done by SCP members in advance prior to the
installation of major equipment and machineries.
Therefore it is essential to be understood the substance of DCS.
* Laboratory and workshop equipment are also necessary for smooth plant operation,
including technical training.
8-17
Start of the Detailed

Feasibility Study
Partial and/or minor
Rehabilitation works by SCP
as the part of maintenance
work at own budget
Check & Diagnoses of
Review of the existing
Drawings of the facilities by
existing SCP/MIM or the
facilities 3rd party
Report
MIM Definition of Project Scope and

and/or Preliminary Plan of Rehabilitation
MOPDC Scope
Definition of Offshore Definition of Onshore scope

Contractor's scope
Confirmation of
Technical Feasibility
Engineering and
Procurement cost
estimate for offshore
portion
Execution Plan
Overall Schedule of
Rehabilitation Project
Completion of Rehabilitation Plan
Negotiation between both Governments
Figure 8.6-1: Action Flow Chart for Materialization of Rehabilitation

(Source: Compiled by Study Team)
8-18
APPENDIX
The Investment Law No (13) of 2006
In the name of the people

The Presidency Council
Pursuant to what was approved by the Council of Representatives and endorsed by the
Presidency Council and based on the provisions of paragraph (First) of Article (61) and
paragraph (Third) of Article (73) of the Constitution, the following law is promulgated:
No (13) of 2006
The Investment Law
Chapter One
Definitions
Article (1)
The following terms, wherever mentioned in this Law, shall have the following specific
meanings unless the context indicates otherwise:
A. The Council: The Council of Ministers
B. National Commission for Investment: The Commission established in
accordance with this law responsible for drawing up the national policy and
laying out its guidelines and monitoring the implementation of these
guidelines and instructions in investment. It shall specialize in investment
projects of a federal nature exclusively.
C. Region’s Commission: The investment commission of the region responsible
for granting investment licenses in the region.
D. Governorate Commission: The investment commission of the governorate not
organized in a region responsible for investment planning and granting
investment licenses in the governorate.
E. The Commission: The National Commission for Investment or the Region’s
Commission or the Governorate Commission as the case.
F. Chairman of the Commission: The Chairman of the National Commission for
Investment
G. The Project: The economic activity subject to the provisions of this law.
H. The Assets: The tools, apparatuses, equipments, machineries, requirements,
gear, transportation means and office furniture specified for exclusive use in
the project, and the furniture, furnishings and the requirements of the hotels,
tourist cities, hospitals, schools and colleges
Page 1 of 16
I. The Foreign Investor: Is the investor who does not hold the Iraqi nationality in
the case of a real person, and is registered in a foreign country in the case of a
juridical or legal person
J. The Iraqi Investor: Is the investor who holds Iraqi Nationality in case of a real
person and is registered in Iraq in the case of a juridical or legal person.
K. Taxes and Fees: All types of taxes and fees levied in accordance with the
applicable laws.
L. The designed production capacity: Is the production capacity designed within
a specific unit of time (hour, unit, day … etc) in accordance to what is fixed in
the documents incoming with the machines of the supplier.
M. Investment Portfolio: A collection of investments in shares and bonds.
N. Investment: Is the investment of capital in any economic or service activity or
project that results in a legitimate benefit for the country.
Goals and Means
Article 2
This law aims at the following:
First: To promote investment and transfer modern technologies in order to
contribute to the process of developing and enhancing Iraq, and expanding and
diversifying its production and service base.
Second: To encourage the Iraqi and foreign private sector to invest in Iraq by
providing the required facilities for establishing investment projects and
enhancing its competitive capacities in the local and foreign markets for projects
included in this law.
Third: To develop human resources based on market demands and provide work
opportunities for the Iraqis.
Fourth: To protect the rights and properties of investors.
Fifth: To expand exports and improve the balance of payments and the balance
of trade of Iraq.
Article 3
The following means shall be adopted to realize the objectives of this law:
First: To grant projects covered by the provisions of this law the necessary
privileges and guarantees for its continuation and development by providing
support in a way that enhances the competitive capacities of these projects in the
local and foreign markets.
Page 2 of 16
Second: To grant projects that obtained an investment license from the
Commission, additional facilities and exemptions from taxes and fees in
accordance with the stipulations of this law.
Chapter Two
The National Commission for Investment and the
Investment Commissions in the Regions and Governorates
Article 4
First: A Commission shall be established and called the “The National
Commission for Investment”. It shall enjoy a juridical personality and shall be
represented by the Chairman of the Commission or the person authorized by him.
It shall be responsible for drawing up the national policies for investment and
drawing up its plans, regulations and guidelines as well as monitoring the
implementation of these guidelines and instructions in investment. It shall
specialize in strategic investment projects of a federal nature exclusively.
Second: The National Commission for Investment” shall be managed by a Board

of Directors comprised of nine members who must be competent and specialized,
and hold a college degree that suits the specialty of the Commission. They must
not have been sentenced for a felony or misdemeanor of moral turpitude, or have
declared their bankruptcy
Third:
A. Upon a request by the Prime Minister, the Council of Ministers shall
nominate a Chairman of the Commission at a grade of Minister and a
Deputy Chairman at a grade of Deputy-Minister for a period of five years
and present them to the Council of Representative for approval.
B. The Prime Minister shall appoint four members for a period of five years
at a grade of Director General.
C. The Prime Minister shall select three members from the private sector for
five years after their nomination by Chairman of the Commission and
specifying their compensations according to the bylaws.
D. At the conclusion of the membership of any member of the Commission
referred to in Paragraph (A and B) of this Article in cases not involving
dismissal and resignation, the Prime Minister shall assign them to any
governmental entity at the same grade. Those mentioned in (A) of this
article shall be retired on pension when not assigned to a government
position equivalent to their grade.
E. The Council of Representatives may directly dismiss the Chairman of the
National Commission for Investment and his Deputy, or upon a request by
the Prime Minister for compelling reasons.
Page 3 of 16
F. The Council of Ministers may dismiss or replace any member of the
Commission or replace him with others in case he does not adhere to the
standards and regulations of the Commission.
G. The Board of Directors of the National Commission for Investment shall
meet at the invitation of its Chairman. A bylaw issued by the Commission
shall specify the quorum, decision taking, making recommendations and
the course of work of the Commission and any other issue.
H. The National Commission for Investment shall be connected to the Prime
Minister.
I. The salary scale and entitlements of the Commission’s employees shall be
determined by a decision of the Prime Minister based on a proposal from
the Chairman of the National Commission for Investment.
Fourth:
The Commission’s headquarters shall be in Baghdad and it may appoint representatives
in the regions and governorates.
Fifth: The National Commission for Investment shall draw up an overall national
strategic policy for investment identifying the more important of the sectors and shall
prepare a map of investment projects in Iraq in the light of the information it receives
from the regions and governorates. It shall also prepare lists of investment opportunities
in strategic and federal investment projects with initial information about these projects
and making it available to those wishing to invest.
Article 5
First: The regions and governorates not organized in a region may form
investment commissions in their areas. The latter shall enjoy the powers of
granting the investment licenses, investment planning, promoting investment and
opening branches in their areas within the provisions of this law in consultation
with National Commission for Investment to guarantee the availability of the
legal conditions.
Second: the Investment Commissions of the regions and governorates shall be

composed of at least seven members including the chairman and the vice
chairman of at least seven years of experience and competence and with a
university degree appropriate to the specialization of the commission and not
convicted in a felony or a misdemeanor involving turpitude or has declare his
bankruptcy.
Third: The regions and governorates not organized in a region shall establish a
mechanism of forming the investment commission of the region and the
governorate and removing the Commission’s members in case he/she does not
adhere to the standards and charters of the Commission in a way which is not in
conflict with the provisions of this law.
Fourth: The Investment Commissions of the regions and governorate shall

coordinate their work with the National Commission for Investment, and shall
Page 4 of 16
coordinate and consult with local governments regarding investment plans and
facilities.
Fifth: The regions and governorates commissions shall draw up their investment
plan in a way that does not contradict with the federal investment policy and shall
prepare list of the investment opportunities in the areas that are subject thereto,
with initial data about these projects and offer it to those wishing to invest.
Sixth: The region’s Commission shall be connected to the Prime Minister of the
region and is subject to the scrutiny of the region’s Council. The governorate
commission shall be connected to the Governor and is subject to the scrutiny of
the governorate council in way that does not contradict with the provisions of this
law.
Seventh: Regions and Governorates Commissions board of directors shall convene

upon an invitation from their chairman. The quorum of convening and adopting
resolutions and recommendations shall be determined by absolute majority. The
conduct of work shall be organized by by-laws issued by the Commission.
Article 6
In addition to ordinary correspondence, the Commission may adopt electronic mail with
the official entities connected with the work and activity of the Commission through local
networks or the Internet according to guidelines set by the Commission.
Article 7
A. The Commission shall accept investment license requests for projects whose
capital is not less than the minimum amount determined by the Council of
Ministers or the Council of Ministers of region as the case, by a regulation issued
based on a proposal by the Commission.
B. The Commission must obtain the approval of the Council of Ministers before
granting the license if the value of the investment project is more than two
hundred and fifty million dollars.
C. The Commission shall make its final decision concerning the requests of
investment license within a period not exceeding (45) forty five days from the
date of filing a request.
D. The decisions of the Commission regarding the approved investments projects
shall be obligatory for the purposes of this law.
Article 8
The Commission shall have an independent annual budget whose revenues shall be made
up of its allocated amounts in the State General Budget.
Page 5 of 16
Article 9
The Commission shall promote investment by working on the following:
First: Building confidence in the investment environment, identifying investment
opportunities, and promoting and stimulating investment in them.
Second: Simplifying the procedures for registration, issuing of investment

projects licenses, and following up on existing projects and giving them priority
in processing with the official entities. Completing the procedures of answering
investor requests and obtaining the required approvals for the investor and the
project.
Third: Establishing one window at the National Commission for Investment and
the Regions and Governorates Commissions, which includes authorized
representatives from the ministries, and members nominated by the Councils of
the regions and governorates as the case and the concerned authorities to
undertake issuing licenses and obtain the approvals of other authorities in
accordance with the law.
Fourth: Providing advice, information, and data to investors and issuing special
manuals in this regard.
Fifth: Setting forth and implementing programs to promote investment in different

areas of Iraq in order to attract investors.
Sixth: Facilitating the allocation of the needed lands and renting them out for
establishing projects for a sum to be determined by the Commission in
coordination with the concerned authorities.
Seventh: Establishing secure and free investment areas with the agreement of the
Council of Ministers.
Eighth: Encouraging Iraqi investors (residing in Iraq) through providing them

with easy loans and financial facilities in coordination with the Ministry of
Finance and with the assistance of Banking Institutions, provided that the investor
obtaining the loan shall employ a number of unemployed Iraqis proportional with
the volume of the loan.
Ninth: Any other tasks related to its work and assigned by the Council of
Ministers.
Page 6 of 16
Chapter Three
Privileges and Guarantees
Article 10
The Investor irrespective of his/her nationality shall enjoy all privileges, facilitations and
guarantees and shall be subject to the obligations stated in this law. The Iraqi and foreign
investor shall have the right for, the purposes of housing projects, the use of the land for a
sum to be determined between him and the land owner without land speculation
according to conditions set forth by the National Commission for Investment and the
approval of the Council of Ministers. The Commission shall facilitate the allocation of
the required lands for the housing projects. The housing units shall be allocated for
ownership by the Iraqis after the completion of the project.
Article 11
The investor shall enjoy the following benefits:
First: The investor shall have the right to take out the capital he brought into Iraq
and its proceeds in accordance with the provisions of this law and pursuant to the
instructions of the Central Bank of Iraq in an exchangeable currency after paying
all his taxes and debts to the Iraqi Government and all other authorities.
Second: The foreign investor shall have the right to:

A. Exchange shares and bonds listed in the Iraqi Stock Exchange.
B. Form investment portfolios in shares and bonds.
Third: Renting or leasing lands needed for the project for the term of the
investment project, provided that it does not exceed 50 years renewable with the
agreement of the Commission, and provided that the nature of the project and its
benefit for the national economy is taken into consideration when determining the
period.
Fourth: Insuring the investment project with any foreign or national insurance
company it deems suitable.
Fifth: Opening accounts in Iraqi or foreign currency or both at a bank inside or

outside Iraq for the licensed project.
Article 12
This law shall guarantee the following for the investor:
First: Priority in recruitment and employment shall be given to Iraqi workers. The
right to employ and use non-Iraqi workers in case it is not possible to employ an
Page 7 of 16
Iraqi with the required qualifications and capable of performing the same task in
accordance with guidelines issued by the Commission.
Second: Granting the foreign investor and non-Iraqis working in the investment
projects the right of residency in Iraq and facilitating his/her entry and exit to and
from Iraq.
Third: Non-seizure or nationalization of the investment project covered by the

provisions of this law in whole or in part, except for projects on which a final
judicial judgment was issued.
Fourth: Non-Iraqi technicians and administration employees working in any

project shall have the right to transfer their salaries and compensations outside
Iraq in accordance with the law after paying their dues and debts to the Iraqi
government and all other entities.
Article 13:
Any amendment to this Law shall not have any retroactive affect regarding the
guarantees, exemptions, and rights recognized by this Law.
Chapter Four
Investor Obligations
Article 14:
The investor shall observe the following:
First: To notify the National Commission for Investment (inserted in handwriting
), the Region or Governorate Commission in writing immediately after the
installation and equipping of the fixed assets for the purposes of the project and
the date of the beginning of commercial activity.
Second: To keep proper records audited by a certified accountant in Iraq in

accordance with the law.
Third: To provide an economic and technical feasibility study for the project and
any information, data or documents required by the Commission or other
competent authorities regarding the budget of the project and the progress made in
its execution.
Page 8 of 16
Fourth: To keep records of the project’s duty-free imported materials in
accordance with the provisions of this Law and specifying the depreciation
periods of these materials.
Fifth: To protect the safety of the environment and to adhere to the valid quality
control systems in Iraq and international regulations accredited in this field, also
the laws related to security, health, public order and values of the Iraqi society.
Sixth: To adhere to the valid Iraqi laws regarding salaries, vacations, work hours
and conditions and others as a minimum.
Seventh: Commitment to the correspondence of the work progress schedule

submitted by the investor with reality provided that the time difference shall not
exceed six months, and that the National Commission for Investment shall set
forth punitive conditions in case of exceeding the six-month period and that the
Commission shall have the right to withdraw the license.
Eighth: To train and rehabilitate its Iraqi employees as well as raising their
efficiency, skill and capabilities. Priority in employment and recruitment shall be
given to the Iraqis.
Chapter Five
Exemptions
Article 15
First: The project that has obtained an investment license from the Commission
shall enjoy exemption from taxes and fees for a period of (10) ten years as of the
date of commencing commercial operations in accordance with the areas of
development defined by the Council of Ministers at the suggestion of the National
Commission for Investment based on the degree of economic development and
the nature of the investment project.
Second: The Council of Ministers shall have the right to propose draft laws to
extend or grant exemptions in addition to the exemptions stipulated in paragraph
(First) of this Article, or provide incentives, guarantees or other benefits to any
project or sector or region and for the years and percentages it deems appropriate
in accordance with the nature of the activity, its geographical location and its
contribution to manpower employment and its effect on driving the economic
development, and for considerations of national interest.
Third: The National Commission for Investment has the right to increase the
years of tax and fees exemption in a way directly proportional to the increase in
the Iraqi Investor share in the project to reach fifteen years if the Iraqi Investor
share in the project was more than 50%.
Page 9 of 16
Article 16
If the project is moved during the granted period of the exemption from a development
area to another, the project shall receive, for the purposes of the exemption mentioned in
paragraph (First) of Article (15) during the remaining term, the treatment of the projects
in the development areas it is moving to, provided that the Commission is informed of
such move.
Article 17
The project that obtains an investment license shall also enjoy the following:
First:
Assets imported for the purposes of the investment project shall be exempted
from fees, provided that their entry to Iraq is made within (3) three years
from the date of granting the investment license.
Second:
The imported assets required for the expansion, development or
modernization of the project shall be exempted from fees in case they led to
an increase in the designed capacity, provided they are brought in within three
years from the date of notifying the Commission of the expansion or
development. Expansion, for the purposes of this law, shall mean adding fixed
capital assets aimed at increasing the designed capacity of the project in
commodities or services or materials by a percentage exceeding (15%) fifteen
percent. Development, for the purposes of this law, shall mean replacing
project machines with more developed ones, totally or partially or making a
development on the standing devices and equipments of the project by adding
new machines and devices or parts thereof with the aim of raising the
productive efficiency or improving and developing the quality of the products
and services.
Third: Spare parts imported for the purposes of the project shall be exempted
from fees if the value of these parts does not exceeded (20%) twenty percent of
the fixed assets value, provided that they are not be used for any other purpose.
Fourth: Hotels, tourist institutions, hospitals, health institutions, rehabilitation

centers and educational and scientific organizations projects shall be granted
additional exemptions from duties and taxes on their imports of furniture,
furnishings and requisites for renewing and updating purposes at least once every
four years, provided that these items are brought into Iraq or used in the project
within (3) three years from the date of the approval decision of the Commission
on the import lists and their quantities, and provided that these items are not used
for purposes other than the imported purposes.
Page 10 of 16
Article 18
If it is found that the fixed assets exempted, in whole or in part, from taxes or fees were
sold in violation of the provisions of this law or were used in anything other than the
project or for purposes other than the authorized purposes, the investor must pay the
taxes, fees, and fines incurred pursuant to the law.
Chapter Six
Procedures for Granting Investment and
Project Establishment License
Article 19
First: The investor shall obtain the license in addition to obtaining the rest of the
licenses for the purpose of enjoying the privileges and exemptions provided by
the Commission.
Second: The Commission shall grant the license for investment or project
formation based on a request submitted by the investor according to conditions
facilitated and prepared by the Commission. The request submitted by the
investor shall include the following:
A. Filling a request form prepared by the Commission
B. Financial competency from an accredited bank
C. Projects performed by the investor inside or outside Iraq
D. Details of the project intended to invest in and its economic feasibility.
E. A timetable for completing the project.
Article 20
First: The Commission must issue the establishing license through establishing
one window in the region or the governorate not organized in a region that
includes authorized representatives of the ministries and relevant bodies. The
Commission shall grant project formation license and obtain approvals from the
entities in accordance with the law.
Second: The Commission must help the investor to obtain licenses by

approaching the competent authorities and exploring the opinions of the entities
concerning the issuance of the formation license. These entities must issue the
decision to reject, approve or request amendment within 15 days from the date of
being notified. The failure to reply from the entity from which the opinion is
solicited shall be deemed as an approval and in case of a rejection there must be
cause for it.
Page 11 of 16
Third: In case of disagreement between the National Commission for Investment
decision and the other relevant entity regarding the granting of the license other
than the Region’s Commissions, the dispute shall be brought before the Prime
Minister for settlement.
Fourth: In case the request for registration is rejected, the requestor may file a
complaint to the Chairman of the region or the governorate Commission
concerned within (15) fifteen days after receiving notification of the rejection
decision. The Chairman of the Commission concerned shall take a decision
concerning the complaint in question within a period of seven days. The petitioner
may appeal the decision of the Chairman of the Commission concerned rejecting
his complaint to the authority to which the Commission concerned is connected to
within 15 days from the date the complaint’s rejection and its decision is deemed
final.
Chapter Seven
General Provisions
Article 21
The project capital subject to the provisions of this law shall be made up of the following:
First: Cash transferred to Iraq through financial banks and companies or any other
legal means with the aim of investing it for the purposes of this law.
Second: The in-kind assets and incorporeal rights imported to Iraq or purchased
from the local markets by the cash transferred into Iraq:
A. In-kind assets related to the project.
B. The machinery, tools, equipment, buildings, constructions, transportation
means, furniture and offices appliances required for establishing the
project.
C. The incorporeal rights that include patents, registered trade marks,
technical know-how, engineering services, administrative and marketing
services and the similar.
Third: Profits, proceeds and reserves resulting from the capital invested in Iraq in
the project if the capital of such a project was increased or was invested in another
project covered by the provisions of this law.
Article 22
Page 12 of 16
The foreign investor shall enjoy additional privileges in accordance with international
agreements signed between Iraq and his country or multilateral international agreements
which Iraq has joined.
Article 23
If the project ownership is transferred during the granted period of the exemption, it shall
continue to enjoy granted exemption, facilities and guarantees until the end of that period,
provided that the new investor continue to work on the project in the same specialization
or in another, with the approval of the Commission. The new investor must take the place
of the former investor in the rights and obligations consequent to the provisions of this
law.
Article 24
First: The investor, with the approval of the Commission, may sell exempted fixed
assets or relinquish it to another investor benefiting from the provisions of this law,
provided that he uses them in his project.
Second: The investor, after informing the Commission, may sell the exempted
fixed assets to any person or other project not subject to the provisions of this law
after paying the outstanding fees and taxes.
Third: The investor, with the approval of the committee, may re-export the
exempted fixed assets.
Article 25
In the event two or more companies or enterprises merge, the new company or entity
resulting from the merger must set up separate accounts for each project before the
merger in order to register and apply exemptions and facilitations stipulated in this law
during the remaining period of the exemption.
Article 26
Any project approved in accordance with the provisions of the previous applicable laws
shall continue to benefit from all exemptions granted to it pursuant to that law and until
the expiration of the exemption period and under the same terms.
Article 27
Disputes arising between parties who are subject to the provisions of this law shall be
subject to the Iraqi law unless otherwise agreed, contrary to the cases that are subject to
the provisions of the Iraqi law exclusively or the jurisdiction of Iraqi courts.
1. Disputes arising from the work contract shall exclusively be subject to the
provisions of the Iraqi law and the jurisdiction of Iraqi courts. Non-Iraqi
laborer shall be exempted if the work contract stipulated otherwise.
Page 13 of 16
2. If parties to a dispute are non-Iraqis and in disputes not arising from a
crime, the opponents may agree on the law to be applied, the competent
court or any other agreement to resolve their dispute.
3. If a dispute between the partners or between the owner of the project and
others in a project subject to the provisions of this law resulted in the
stoppage of work for a period exceeding three months, the Investment
Commission may withdraw the license and ask the owners of the project
to settle the dispute within a period not to exceed three months. If such
period elapsed without settling the dispute between the partners or
between the owner of the project and others, the commission may take
legal measures to liquidate the project and notify the owner of the project
or one of the partners of such action. The liquidation money shall be
deposited in one of the banks after paying the dues of the State or any
other dues after final judgment of their entitlement is rendered.
4. If one of the parties to a dispute is subject to the provisions of this law,
they may, at the time of signing the agreement, agree on a mechanism to
resolve disputes including arbitration pursuant to the Iraqi law or any other
internationally recognized entity.
5. Disputes arising between the Commission or any governmental entity and
any of those subject to the provisions of this law on matters not related to
violations of one of the provisions of this law shall be subject to Iraqi law
and courts on civil matters. As for commercial disputes, parties may resort
to arbitration provided that such an arrangement is stipulated in the
contract organizing the relationship between parties.
Article 28
In case the investor violates any of the provisions of this law, the Commission shall have
the right to warn the investor in writing to remove the violation within a specific period.
In case the investor does not remove the violation within the specified period, the
Commission shall summon the investor or who represents him to state his position and
grant him other respite to settle the issue. Upon repeating or not removing the violation,
the Commission shall have the right to withdraw the investor’s license it issued and order
stoppage of work on the project and retain the State’s right to deny the investor the
granted exemptions and privileges from the date of the violation and allow others to
retain their rights to demand compensation for the damage caused by this violation,
without breaching any punishments or other compensations stipulated in the applicable
laws.
Article 29
All areas of investments shall be subject to the provisions of this law except:
First: Investment in Oil and Gas extraction and production.
Second: Investment in banks and insurance companies sectors.
Page 14 of 16
Article 30
The Council of Ministers shall have the right to:
First: Issue regulations to facilitate the implementation of the provisions of this
law.
Second: Issue bylaws defining the Commission’s formations, divisions, tasks,

process of its work, its authorities, financial affairs, employee affairs and any
others matters.
Article 31
The Committee may issue instructions to facilitate the implementation of regulations
issued by the Council of Ministers pursuant to the provisions of this law.
Article 32
The Provisions of this law shall be applied to the existing and operating projects of the
mixed and private sectors which have commenced before the issuance of this law and
upon a request from its management and the approval of the Commission with no
retroactive effect.
Article 33
No text shall be valid which contradicts the provisions of this law.
Article 34
The (dissolved) CPA Order No. 39 of 2003 shall be revoked.
Article 35
The Arab Investment Law no (62) of 2002 issued by the dissolved Revolution Command
Council shall be annulled.
Article 36
This Law shall enter into force from the date of its publication in the Official Gazette.
Justifying Reasons
For the purpose of driving the process of economic and social development and bringing
technical and scientific experience and developing human resources, and for creating
work opportunities for the Iraqis by encouraging investments and supporting the process
of establishing investment projects in Iraq and their expansion and development at
various economic levels and by granting privileges and exemptions for these projects,
this law is legislated.
Page 15 of 16
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No.

Ministry of Industry and Minerals

Preliminary Feasibility Study Report on

Japan International Cooperation Agency (JICA)

UNICO International Corporation

This survey was conducted by the Consortium of UNICO International Corporation,

Very truly yours,

Chapter 1 Background of the Project

1.1 Purpose of the Study ..........................................................................................................1-1

1.2 Contents and Method of the Study .....................................................................................1-1

1.3 Study Structure...................................................................................................................1-2

1.4 Study Schedule and Overview of Study Trip.....................................................................1-3

1.4.1 Study Schedule .............................................................................................................1-3

1.4.2 Overview of Study Trip................................................................................................1-4

Chapter 2 General Information of Iraq and the Project Site

2.1 General Information of Iraq ...............................................................................................2-1

2.2 Al-Anbar Governorate........................................................................................................2-1

2.2.1 General Information .....................................................................................................2-1

2.2.2 Geography ....................................................................................................................2-2

2.2.3 MIM Sector in Iraq.......................................................................................................2-3

Chapter 3 Overview of Industry and Minerals Sector in Iraq

3.1 Overview of Industry and Minerals Sector ........................................................................3-1

3.2 History and Organization of the Ministry of Industry and Minerals..................................3-2

3.2.1 History of the Ministry of Industry and Minerals ........................................................3-2

3.2.2 Organization of the Ministry of Industry and Minerals................................................3-4

3.2.3 Outline of State Owned Companies in Industry and Minerals Sector..........................3-4

4.1.1 Current Status ...............................................................................................................4-1

4.1.2 Issues ............................................................................................................................4-3

4.2.1 Overview of the National Development Strategy of Iraq.............................................4-4

4.2.2 Positioning of the Oil and Gas Industry .......................................................................4-5

4.2.3 Positioning of the Industry and Minerals Sector ..........................................................4-6

4.2.4 Positioning of the Chemical Fertilizer Industry ...........................................................4-8

4.3.1 Recent Reconstruction Policies and their Outcomes....................................................4-10

4.3.2 Directionality of Reconstruction Policies beyond 2010...............................................4-11

4.4.1 Privatization Policies of the Coalition Provisional Authority (CPA) ...........................4-12

4.6 Assistance by International Aid Agencies (Donors) ..........................................................4-17

4.7 Mining and Manufacturing Sector in Mid-Western Iraq....................................................4-18

4.7.1 Mining and Manufacturing Sector in Mid-Western Iraq ..............................................4-18

4.7.2 Glass Industry...............................................................................................................4-20

4.7.3 Cement Industry ...........................................................................................................4-23

4.7.3.1 Overview of Three Cement Companies in Iraq....................................................4-23

4.7.3.2 Overview of Refractory Bricks in Iraq.................................................................4-26

Chapter 5 Market Trend of Chemical Fertilizer Industry

5.1 Global Market Trend of Chemical Fertilizer Industry .......................................................5-1

5.1.1 Nitrogen Fertilizer ........................................................................................................5-1

5.1.2 Phosphate Fertilizer......................................................................................................5-7

5.1.3 Potassium Fertilizer......................................................................................................5-13

5.2 Trend of Chemical Fertilizer Industry in Iraq ....................................................................5-17

5.2.1 Production Trend ..........................................................................................................5-17

5.2.2 Demand Trend ..............................................................................................................5-21

5.2.3 Fertilizer Production, Consumption and Trade in Iraq’s Neighboring Countries

5.2.4 Fertilizer Prices and Related Government Subsidies in Iraq........................................5-32

5.2.5 Iraqi Trade Balance ......................................................................................................5-34

5.3 Chemical Fertilizer Demand Forecast in Iraq ....................................................................5-35

5.3.1 Agriculture Sector and Agricultural Policy in Iraq.......................................................5-35

5.3.2 Current Conditions and Challenges of Water Resources in Iraq ..................................5-39

5.3.3 Chemical Fertilizer Demand Forecast in Iraq ..............................................................5-45

Chapter 6 State Company for Phosphate and Al-Qaim Chemical Complex

6.1 Overview of State Company for Phosphate .......................................................................6-1

6.1.1 Current Status of SCP...................................................................................................6-1

6.1.2 Plants and Other Facilities Owned by SCP ..................................................................6-2

6.1.3 Trend of SCP Operation ...............................................................................................6-5

6.1.4 SCP Product Prices.......................................................................................................6-9